Under CIPPA an economic item consists of three
elements:
(1) the
value of the item expressed in terms of unstable money,
(2) the
date of the event / exchange / transaction / contract and
(3) the
nominal value of the daily index or daily monetized indexed unit of account or
daily relatively stable foreign currency parallel rate on that date.
All items are valued at the original date and
thereafter daily (more often during severe hyperinflation when the parallel
rate can change more than once a day) at all future dates in terms of IFRS,
excluding the stable measuring unit assumption and the IFRS definitions of
monetary items in 2011, implementing financial capital maintenance in units of constant
purchasing power in terms of a daily rate at all levels of inflation and
deflation always with reference to the daily rate at the original date.
The
nominal monetary value of, for example a constant item changes daily in terms
of the daily rate, but its real value is maintained constant over time at all
levels of inflation and deflation under CIPPA.
Nicolaas Smith
Copyright (c) 2005-2012 Nicolaas J Smith. All rights reserved. No reproduction without permission.
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