Friday, 27 January 2012

Monetary items

Monetary items

The IFRS definitions of monetary items in IAS 29, Par. 12 and IAS 21, Par. 8 need to be improved because non-monetary items are all items that are not monetary items. The definition of monetary items thus determines which items are non-monetary items per IFRS. When the definition of monetary items is incorrect then the division of monetary and non-monetary items is incorrect as it currently is in terms of IFRS.

IAS 29, Par. 12

'Monetary items are money held and items to be received or paid in money'

IAS 21, Par. 8

'Monetary items are units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency.'


Monetary items constitute the Money supply.

Updated on 11-05-2013

Examples of units of money held are bank notes and coins of the fiat currency created within an economy by means of fractional reserve banking. Examples of items with an underlying monetary nature which are substitutes for money held include the capital amount of: bank loans, bank savings, credit card loans, car loans, home loans, student loans, consumer loans, commercial and government bonds, Treasury Bills, all capital and money market investments, notes payable, notes receivable, etc. when these items are not in the form of money held.

Nicolaas Smith

Copyright (c) 2005-2012 Nicolaas J Smith. All rights reserved. No reproduction without permission.

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