The use and perceived usefulness of IAS 29 general price level information in Zimbabwe
Master Thesis
2003
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University of Cape Town
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Abstract
Hyperinflation, as defined in IAS 29, was identified in Zimbabwe in November 1999. Accordingly, the standard, and its General Price Level adjustments, was adopted for financial years beginning on 1st January 2000. However, there has been much resistance to the implementation of the standard, which is considered to require the provision of costly, meaningless information that is not used by anyone in the investment process. This study attempts to determine the use and perceived usefulness of IAS 29 in Zimbabwe and to identify the significant problems and weaknesses in the restatement process that have caused this. The study found both the use and perceived usefulness of IAS 29 General Price Level information to be extremely low. The major reason cited for this was the lack of user understanding. The other major problems related to the perception of inconsistent methods and assumptions in the restatement process, as well as the use of the CIP, accused of being manipulated by government, as the basis of restatement. These issues need to be addressed by the Institute of Chartered Accountants, in consultation with the other accounting regulatory bodies, before the use and perceived usefulness of the IAS 29 General Price Level information can improve. Further, the study indicates that, whilst the preparers of financial information are extremely undecided as to the manner in which the accounting regulatory bodies in Zimbabwe should proceed, the analysts using such information are very much in favour of retaining the disclosure of inflation adjusted figures in some form, until such time as the inherent usefulness of the information is either proved or disproved.
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Bibliography: leaves 66-70.
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Reference:
Levy, M. 2003. The use and perceived usefulness of IAS 29 general price level information in Zimbabwe. University of Cape Town.