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Showing posts with label SA accountants confused. Show all posts
Showing posts with label SA accountants confused. Show all posts

Friday 26 February 2010

SA accountants confused

SA accountants and accounting lecturers at SA universities do not understand that they can stop this unknowing destruction by SA accountants of about R200 billion per annum in the real value of SA companies´ constant items never maintained by simply rejecting the stable measuring unit assumption when they freely choose the IFRS compliant financial capital maintenance in units of constant purchasing power model at all levels of inflation and deflation.

IFRS do, however, already – 21 years ago – allow the rejection of the stable measuring unit assumption as an alternative to HCA at all levels of inflation and deflation. The IASB´s Framework, Par 104 (a) states:

"Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power."

Par 104 (a) was authorized by the IASB predecessor body, the International Accounting Standards Committee Board in April, 1989 and adopted by the IASB in 2001.

The stable measuring unit assumption is also rejected in IAS 29 Financial Reporting in Hyperinflationary Economies.

The Standards already reject the stable measuring unit assumption under the above two circumstances.
Copyright © 2010 Nicolaas J Smith