a.) The principle treated in the topic, namely, financial capital maintenance in units of constant purchasing power, was originally authorized in IFRS in the Framework, Par 104 (a) in 1989.
b.) In developing the topic, CIPPA introduces several new accounting concepts and terms for the first time, e.g.:
(i) Financial capital maintenance in units of constant purchasing power during LOW inflation and deflation – not only during very high and hyperinflation.
(ii) The split of non-monetary items in variable and constant items making this model possible during low inflation and deflation.
(iii) Not just 2 but three basic economic items.
(iv) Variable item economy.
(v) Constant item economy.
(vi) Net Constant Item Loss.
(vii) Net Constant Item Gain.
(viii) Daily Consumer Price Index.
(ix) Inflation Illusion.
(x) Accounting-Dollarization.
c.) The fact that IFRS authorize three instead of the generally accepted two concepts of capital and capital maintenance was first published on this blog.
Nicolaas Smith Copyright (c) 2005-2011 Nicolaas J Smith. All rights reserved. No reproduction without permission.
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