Monday, 6 January 2014

"No capital maintenance required during low and high inflation and deflation"

"No capital maintenance required during low and high inflation and deflation"

IASB´s Capital Maintenance Discussion Paper:

Question 26

Capital maintenance 

Capital maintenance is discussed in paragraphs 9.45–9.54. The IASB plans to include the existing descriptions and the discussion of capital maintenance concepts in the revised Conceptual Framework largely unchanged until such time as a new or revised Standard on accounting for high inflation indicates a need for change. 

Do you agree? Why or why not? Please explain your reasons. 

"Capital maintenance was an important conceptual issue long time ago. In the modern world, this is particularly of importance only to hyper-inflationary economy and IASB is better off tackling this in a separate and dedicated Standard on hyperinflation economy." 

Professor Ho Yew Kee 
Department of Accounting 
NUS Business School 
National University of Singapore\ 
4 November 2013

Prof. Ho Yew Kee´s complete comment letter is available HERE dated 2014-01-06 on Page 1.

Professor Ho Yew Kee does not know about the existence of IAS 29 Financial Reporting in Hyperinflationary Economies authorised by the IASB twenty-four years ago in 1989. He has a completely mistaken view of capital maintenance during low and high inflation and deflation - on par with the IASB´s lack of understanding about the fundamental role a capital maintenance concept has within the accounting framework as pointed out by CPA Australia and the Institute of Chartered Accountants Australia as well as by myself

Nicolaas Smith Copyright (c) 2005-2014 Nicolaas J Smith. All rights reserved. No reproduction without permission.

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