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."
IAS 29 not required with Capital Maintenance in Units of Constant Purchasing Power
IAS 29 not required with
Capital Maintenance in Units of Constant Purchasing Power
authorised Financial Capital Maintenance in Units of Constant Purchasing Power at
all levels of inflation and
deflation – including during
hyperinflation - as an alternative to Historical Cost Accounting in the
original Framework for the Preparation and Presentation of Financial
Statements, Par. 104 (a) in 1989 – now the Conceptual Framework (2010), Par.
4.59 (a) - which states:
capital maintenance can be measured in either nominal monetary units or units of constant purchasing power.”
Conceptual Framework, Par. 4.59 (a) does not state that it (Par. 4.59 (a)) only
applies to low inflationary and deflationary economies. It applies to all levels of inflation and
deflation, including during
entity in a hyperinflationary economy is thus authorised in IFRS to measure financial capital maintenance
in units of constant purchasing power; i.e., authorised in IFRS to implement
Capital Maintenance in Units of Constant Purchasing Power during hyperinflation.