The Public Accountants and Auditors Board (PAAB) has revealed that Zimbabwe’s economy is now hyperinflationary. The Board further urged entities that report on inflation to use the IAS 29 model which lists factors that indicate that an economy is hyperinflationary. Below are excerpts from the PAAB public pronouncement.
According to IAS 29: Financial Reporting in Hyperinflationary Economies, it is preferable that all entities that report in the currency of the same hyperinflationary economy apply this Standard from the same date.
Following the processes indicated above, the PAAB can advise that there is broad market consensus within the accounting and auditing professions that the factors and characteristics to apply the Financial Reporting in Hyperinflationary Economies Standard (IAS 29), in Zimbabwe, have been met.
This Public Pronouncement covers the preparation and presentation of financial statements of entities operating in Zimbabwe for the financial periods ended on or after 1 July 2019.
The development comes when the inflation in the country has been constantly rising since the over 24 months ago as prices of commodities are being increased on an unparalleled rate.
Meanwhile, the Ministry of Finance projects that the country’s inflation will drop to around 10% before year-end before it goes down to around 2% in 2020.
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