IFRS and US GAAP authorised CMUCPP maintains the constant purchasing power of constant real value non-monetary items (e.g. capital, all items in shareholders´ equity, provisions, salaries, wages, pensions, taxes, trade debtors/creditors, etc) in terms of a Daily CPI in entities that at least break even in real value during low and high inflation, hyperinflation and deflation - ceteris paribus. European Accounting Assoc: "Capital maintenance is a competing objective of financial reporting."
Strengths of CIPPA compared to books on Capital Maintenance
Strengths of CIPPA compared to books on
1.CIPPA proves there are three concepts of capital and capital
maintenance authorized in IFRS since 1989.
2.CIPPA splits non-monetary items in variable and constant real
value non-monetary items and shows that this split is indirectly defined in
IFRS since 1989.
3.CIPPA proves that it is not inflation but the stable measuring unit
assumption eroding companies´ capital and invested profits.
4.CIPPA proves that financial capital maintenance in nominal
monetary units per se is a fallacy
during inflation and deflation.
5.CIPPA proves that financial capital maintenance in units of
constant purchasing power in terms of a daily rate at all levels of inflation
and deflation automatically maintains the constant purchasing power of capital
constant for an indefinite period of time in all entities that at least break
even in real value – ceteris paribus.
Strengths of books on Capital Maintenance
compared to CIPPA
1.It is generally accepted that there
are only two concepts of capital and capital maintenance, namely, physical and
2.HCA implements financial capital
maintenance in nominal monetary units. The HC paradigm is the generally
accepted global paradigm.
Copyright (c) 2005-2012 Nicolaas J Smith. All rights reserved. No reproduction without permission.