Sunday, 21 January 2018

Basic economic concepts the IASB simply does not understand

1. No exchangeability means no value for a currency. 

No exchangeability with any foreign currency means a currency has no real value and it is not a currency any more.

The IASB defined no exchangeability as severe hyperinflation in IFRS 1 in 2010 and refuses to correct it.

2. Updating all items with all general price level changes means zero monetary effect.

Only updating all economic items with all changes in the general price level - at least daily in terms of the Daily CPI - automatically results in zero monetary effect; that is, zero inflation effect during inflation, zero hyperinflation effect during hyperinflation and zero deflation effect during deflation.

The IASB refuses to correct IAS 29 Financial Reporting in Hyperinflationary Economies - to the detriment of hundreds of millions of people world wide over the last 29 years since its authorization in 1989. 

The IASB has been informed about these matters many times. 

Unfortunately, the Board simply does not understand the above basic economic concepts.

Nicolaas Smith Copyright (c) 2005-2018 Nicolaas J Smith. All rights reserved. No reproduction without permission.

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