Thursday, 30 October 2014

IASB continues to ignore Units of Constant Purchasing Power under HCA

Although all entities that ever used the HISTORICAL COST ACCOUNTING  model during the last 100 years (i.e., almost all entities), all entities using HISTORICAL COST ACCOUNTING  today (i.e., almost all entities) and all entities who will use HISTORICAL COST ACCOUNTING in the future (i.e., almost all entities), used, use and will use the units of constant purchasing power measurement basis to update some expenses, for example, salaries and wages, etc. and some prices, e.g., utility prices, mobile phone call rates, etc. on an annual basis, the IASB and IASB staff (in my personal opinion) very irresponsibly, continue to ignore it in their current proposals for measurement bases under HCA which only include:

All current members of the IASB and IASB staff used measurement in units of constant purchasing power under HISTORICAL COST ACCOUNTING during all of their careers to date. However, they refuse point blank and very irresponsibly to acknowledge its 100 year old usage under HISTORICAL COST ACCOUNTING. We cannot, in my personal, private opinion, accept their view regarding measurement bases under HISTORICAL COST ACCOUNTING, in this case. It would be very irresponsible from users to accept their current very irresponsible refusal to acknowledge that measurement in units of constant purchasing power was a generally accepted measurement basis under HISTORICAL COST ACCOUNTING  for the last 100 years, still is today used under HISTORICAL COST ACCOUNTING and will forever in the future be used while HISTORICAL COST ACCOUNTING is implemented by entities worldwide.
The low quality of current IFRSs thus continues into the future. See, for example, IAS 29 which had no positive effect during the 8 years it was implemented in Zimbabwe´s hyperinflationary economy. The IASB refuses, again point blank, to acknowledge that IAS 29 had no positive effect in Zimbabwe. How can we keep the current IASB members and IASB staff in office when they are - in my personal, private opinion -  clearly very irresponsible?
The current IASB members and IASB staff members are, in my personal opinion (I had personal dealings with a number of IASB staff members in the past), most probably the worst incumbents in the history of the IASB. I have listened to IASB board members during public deliberations.
In my personal opinion, they have unbelievably low levels of knowledge about, for example:
(1) the units of constant purchasing power measurement basis
(2) capital maintenance in units of constant purchasing power in terms of a Daily CPI as was so successfully implemented in Latin America from 1960 till the late 1990´s.
(3) the economy wide stabilizing effect of daily indexing in terms of the Daily CPI.
In my personal opinion, all members of the current IASB as well as all current IASB staff members should be replaced immediately with people who have adequate knowledge about (1) to (3) mentioned above.
A lot of contributors' money is being wasted by keeping the current IASB members and IASB staff members. They should all be replace immediately, in my personal opinion.

See also: 

IASB defines measurement bases under Historical Cost Accounting
Nicolaas Smith 

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