IAS 29 needs to be totally reviewed by the IASB

IAS 29 needs to be totally reviewed by the IASB

This CIPPA project is about financial capital maintenance in units of constant purchasing power during low inflation and deflation.

As a secondary issue, the project also clearly demonstrates the futility of implementing IAS 29 during hyperinflation as required by IFRS and describes the solution: daily updating of all non-monetary items in terms of the daily US Dollar parallel rate or a Brazilian style Unidade de Valor Real index as was done in Brazil during 30 years from 1964 to 1994.  

This supports the current request by many accounting authorities for a total review of IAS 29 by the International Accounting Standards Board.

CIPPA clearly demonstrates that simple restatement of Historical Cost and Current Cost financial statements in terms of the period-end monthly Consumer Price Index during hyperinflation as required by IAS 29 makes absolutely no difference to the destruction of a country´s constant item economy, not by hyperinflation, but, by the stable measuring unit assumption as it forms part of the HCA model as it happened in Zimbabwe over the 14 years of hyperinflation in that country till final monetary meltdown in 2008. IAS 29 was implemented in Zimbabwe since 2002 and made absolutely no difference.

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