Sir David Tweedie´s perfect solution

Accountants are players in the business game because of their specialized knowledge in the monetary game and variable item game which they play together with other management team players. Accountants are always scorekeepers by training in all the games too.

Accountants do not have the assistance of other management team players in the constant item game they play against the stable measuring unit assumption enemy. In the selected income statement constant item game accountants are unbeatable world champions against the stable measuring unit assumption enemy. They inflation adjust salaries, wages, rentals, etc during low inflation and score all the time. The stable measuring unit assumption enemy never scores as long as accountants measure these items in units of constant purchasing power during low inflation.

Now comes the End Game.

The purpose of this game is to maintain the real value of the other income statement and all balance sheet constant items.

The game is played at Ellis Park.

Sir David Tweedie, Chairman of the International Accounting Standards Board leads a delegation from the Board at the game. The IASB has a magnificent exhibition inside the Ellis Park grounds where they demonstrate their indestructible Measurement in Units of Constant Purchasing Power Missile Attack System. This missile kills the stable measuring unit assumption enemy instantaneously whenever this missile is used for an indefinite period of time.

It is very strange that all the Boards of Directors of especially JSE listed companies stream past Sir David´s exhibition without anyone even stopping to look at the deadly weapon. When I ask one of the Board of Directors why that is, they say the exhibition has been there since 1989 and no-one has ever stopped to look at it.

SA accounting professors are Historical Cost gurus. They advised them that accountants are actually only scorekeepers and should not even be on the field playing against the stable measuring unit assumption enemy. They state that there is absolutely no substance in the claim that Sir David´s Measurement in Units of Constant Purchasing Power system can be used during low inflation. They all love the stable measuring unit assumption. They feel that they have proved themselves after their long Historical Cost teaching careers and that anyone who opposes them must be nuts.

I pointed out to them that Sir David has a big poster up saying: FOR USE DURING LOW INFLATION!! The Board of Directors say they don´t understand it especially after the professors´ specific instructions that accountants are only scorekeepers and never players. They seem to be very confused.

The End Game begins.

There are only accountants on the field against the massive stable measuring unit assumption enemy who uses the Historical Cost method. The accountants kick off at the start of the financial year. Then something extraordinary happens. All the accountants get a glazy look in their eyes as if they cannot see the stable measuring unit assumption enemy. They all turn around and meekly go and sit behind the try-line.

The stable measuring unit assumption enemy gathers the ball and trots through unopposed to score under the poles and converts the try. The next kick-off is by the ABSA accountants. After the kick-off they do the same. They quietly run back and sit down behind the try-line. The stable measuring unit assumption picks up the ball, scores under the poles and converts thus destroying about R3.4 billion in the real value of ABSA´s Retained Profits during 2009.

At the end of the game the stable measuring unit assumption enemy has destroyed R200 billion in the real value of SA constant items never updated. The game is over for the year. The accountants being well trained scorekeepers keep score during and after the game.

In this game they are only scorekeepers which prove the professors right – but, only for this mainly balance sheet constant item game. Not for any of the other games. This proves that when accountants are only scorekeepers in Historical Cost nominal monetary values for constant items never updated, real value is destroyed on a massive scale in the SA real economy.

Next year´s game will be exactly the same unless Sir David can get SA Boards of Directors to accept his free offer. He is a very patient man. He has been trying for the last 20 years with not a single free give-away in SA – or anywhere else in the low inflation world. Apparently a rogue SA accountant living in Portugal accepted his offer. Well, at least he managed one free give-away in twenty years.

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