According to the PAAB, in a statement released Friday, entities in Zimbabwe must now apply IAS 29 in their financial reporting, effective July 1, 2019.
IAS 29 deals with financial reporting in hyperinflationary economies, and allowing it to be applied in the country indicates acknowledgement by Zimbabwean authorities that the country has now entered into hyperinflation for the second time in two decades.
Zimbabwe first experienced hyperinflation from around 2005 till 2008, peaking in 2008 at 500 billion percent. The US$1 became equivalent to Z$2 621 984 228. The Zimbabwean dollar was ultimately abandoned in favour of a multi-currency system dominated by the US dollar.
However, an unsustainable import bill, corruption, externalisation of money, coupled with the printing of electronic money (RTGS$), has led the country to another hyperinflation period.
Consumers have had to deal with rampant price increases with the recent one being a 300% increase in electricity tariff and a 26% increase in the price of fuel.
Prices of basic products are now beyond reach of many, with inflation topping 175% in June before government stopped publication of annual inflation figures, saying they were misleading.
The monthly inflation figures have, however, remained elevated, and stood at almost 300% at the last count in August.
As a result, and following due processes: “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,” reads the PAAB statement seen by Fin24.
Post published in: Business