Stable world economy entirely in the
hands of the IASB and the accounting profession
Daily
inflation-indexing of all monetary items is a direct requirement of capital
maintenance in units of constant purchasing power; i.e., it is required by IFRS
as authorized by the IASB.
The
stable measuring unit assumption is never implemented under capital maintenance
in units of constant purchasing power as authorized in IFRS twenty three years
ago. The entire money supply has, consequently, to be inflation-indexed on a
daily basis. This eliminates the entire monetary effect (eroding or increasing of
the real value of monetary items over time) of low inflation, high inflation,
hyperinflation and deflation from the entire monetary economy under complete
co-ordination.
This
requires all banks - commercial and central banks - to inflation-adjust all
monetary items on a daily basis in countries implementing IFRS.
The
Daily Index Plan is thus entirely implemented in terms of IFRS: no Central Bank
intervention is required.
Operating
the world economy in constant monetary and constant real value non-monetary
items (a stable world economy) is thus entirely the responsibility of the IASB:
i.e., entirely in the power of the world´s accountants.
The
IASB has, in fact, authorized capital maintenance in units of constant
purchasing power as an option
to traditional HCA twenty three years ago (in 1989).
However,
almost no-one understands it, with the result that although it was, in
principle, implemented during 30 years of very high and hyperinflation in
Brazil and during 45 years in Chile, these two countries unintentionally and
unknowingly went back to HCA.
The IASB is currently (2012) working on (submitted to
research) a draft IFRS `X´ CAPITAL MAINTENANCE IN UNITS OF CONSTANT PURCHASING,
originally submitted to the IASB by the
Argentinean Accounting Federation in 2010 in conjunction with the accounting
authorities in Brazil, Mexico and Chile, - and then amended by me to its current title and form - that will require (not
optional) capital maintenance in units of constant purchasing power in terms of
a Daily Index in all countries implementing IFRS with annual inflation equal to
or greater than 10 percent or cumulative annual inflation equal to or greater
than 26 percent over three years.
This
will mean the beginning of the end of HCA in the world economy after a reign of
thousands of years: the only paradigm the world has ever known since the
implementation of double entry accounting.
The
IASB always specifically encourages early implementation of a proposed IFRS in
the process of being authorized. The early implementation of a proposed IFRS is
part of the very thorough due process - very responsibly, correctly and
essentially - required prior to authorization by the IASB.
You
are thus very welcome and encouraged by the IASB to implement capital
maintenance in units of constant purchasing power in terms of a Daily Index in your company, preferably
in your entire country, prior to its actual authorization by the IASB in years
to come.
Free
assistance is available to under-developed, developing and emerging market economies from the newly formed (on 30 November 2012 in Lisboa,
Portugal) Non-Governmental Organization SUSTAINABLE
DEVELOPMENT WITHOUT BORDERS, provided you (or a private foundation, NGO or sustainable
economic development organization related to your country) provide the finance
to SDWB to visit your country to advise your accounting authorities in this
matter.
Nicolaas Smith
Copyright (c) 2005-2012 Nicolaas J Smith. All rights reserved. No reproduction without permission.
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