Constant real value non–monetary items

Constant real value non–monetary items

The double entry accounting model was first comprehensively codified by the Italian Franciscan monk, Luca Pacioli in his book Summa de arithmetica, geometria, proportioni et proportionalita, published in Venice in 1494.

Pacioli did not invent the double entry accounting model. He wrote the first book about the practice of double entry accounting in 1494.

Definition

A constant real value non-monetary item is a non-monetary item with a constant real value over time whose real value within an entity is not generally determined in a market on a daily basis.

Examples include borrowing costs, comprehensive income, interest paid, interest received, bank charges, royalties, fees, short term employee benefits, pensions, salaries, wages, rentals, all other income statement items, issued share capital, share premium accounts, share discount accounts, retained earnings, retained losses, capital reserves, revaluation surpluses, all accounted profits and losses, all other items in owners´ equity, trade debtors, trade creditors, dividends payable, dividends receivable, deferred tax assets, deferred tax liabilities, all taxes payable, all taxes receivable, all other non-monetary payables, all other non-monetary receivables, provisions, etc.

Constant items are fixed in terms of real value while their nominal values change daily in terms of a daily rate under financial capital maintenance in units of constant purchasing power (CIPPA).

Nicolaas Smith

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