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Friday, 31 July 2009

Trust me, I´m an accountant: I will destroy your retained profits at a rate equal to the inflation rate.

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AccountingWeb has a headline on the web at the moment: Trust me. I am an accountant. Well, that is the historical cost accounting fantasy st...

6.1 percent real increase in salaries is good for internal demand. Hope it is not inflationary.

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A 13% nominal increase for municipal workers is a 6.1% real increase with annual inflation at 6.9%. That is good for internal demand in the ...
Wednesday, 29 July 2009

A 1% drop in inflation

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A 1% drop in inflation means that R19.5 billion will be maintained in the real value of the SA money supply (real value of the Rand) over th...

Salaries and wages under Constant Item Purchasing Power Accounting

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Under Constant Item Purchasing Power Accounting (CIPPA) all constant items´ - including salaries and wages - real values are maintained con...
Tuesday, 28 July 2009

Anglo Plats destroyed R848 million over the last 6 months

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Anglo Plats had Accumulated Profits of R 19.045 billion on 31 Dec 2007. Their Board of Directors selected the Historical Cost basis to do t...
Saturday, 25 July 2009

The unknown enemy

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Everybody must be very happy to hear that Gill Marcus will be an enemy of inflation. Milton Friedman stated correctly that inflation is al...
Thursday, 23 July 2009

The stable measuring unit assumption is the enemy in the real economy

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Fin24.com today reported that: "Head of research at the South African Reserve Bank (Sarb), Dr Johan van den Heever, said Governor-ele...

Constant items

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Geoffrey Whittington in his definitive work on inflation accounting in the beginning of the 1980´s, Inflation Accounting - An Introduction t...

Generally accepted inflation concepts

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It is generally accepted and a fact that inflation destroys the real value of money (the internal functional currency) and other monetary it...
Wednesday, 22 July 2009

The rejection of the stable measuring unit assumption

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Accountants and accounting authorities do not appreciate that they can stop accountants destroying real value on a massive scale in the real...
Monday, 20 July 2009

It is an essential function of accounting to maintain the real value of constant items during inflation

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1970-style Constant Purchasing Power (CPP) inflation accounting was a popular but failed attempt at inflation accounting at that time. It wa...
Sunday, 19 July 2009

SA accountants´ stable measuring unit assumption costs SA about R200 billion each and every year

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Hi, I point out that SA accountants unknowingly destroy about R200 billion per annum in the SA real economy with their implementation of the...

The battle between sustainable growth and sustainable value destruction

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My comment below was promptly removed from The Sunday Times article : Gill Marcus to replace Mboweni at SARB “In terms of the Constitution, ...

Update to maintain

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SA accountants do not discuss the possibility of destroying R85 bn in the real value of JSE listed companies´ Retained Profits. They are d...

Cosatu: What do you want to do?

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Cosatu: A 1% increase in the inflation target - ceteris paribus - destroys an extra R19.4 billion p.a. in the real value of M3. SA accountan...
Saturday, 18 July 2009

SA accountants unknowingly destroy the real value of constant items never updated

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Inflation is a uniquely monetary phenomenon and can only destroy the real value of money and other monetary items over time. It has no effec...
Thursday, 16 July 2009

The IASB´s Framework, Par. 104 (a) is not about inflation accounting. IAS 29 is.

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During the period of high inflation in the 1970´s accountants tried various inflation accounting models in an attempt to adjust company fina...
Wednesday, 15 July 2009

Constant real value non-monetary item is a new concept

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The South African Reserve Bank is the central bank of the Republic of South Africa. It regards its primary goal in the South African economi...
Tuesday, 14 July 2009

Foshini fooling investors

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Foshini published their Reviewed Unaudited Preliminary Condensed Results for the year ended 31 March 2009: http://www.foschinigroup.co.za/...

Accountants´ unique unstable unit of account

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Non-monetary items are not all fundamentally the same. Non-monetary items are subdivided into variable real value non-monetary items and con...