Talk:Inflation accounting/Archive 1

'''ARCHIVE NOTE: Some sections of this discussion do not flow clearly because an inexperienced editor made changes to the discussion. Please see the article's talk page history for details of all edits.''' --Foggy Morning 12:29, 1 August 2007 (UTC)

The Kane reference does not open
The Kane reference does not open. Can someone fix it. Nicolaas J Smith 13:00, 16 July 2007 (UTC)
 * Nicolaas, this is opening ok for me, but it's a powerpoint file. I think you need Microsoft Office or OpenOffice software to read it. I'll see if there's a non-powerpoint version available on the Internet. --Foggy Morning 13:44, 17 July 2007 (UTC)

To be added
To be inserted: Definition, examples, origin, how valued and updated - of constant real value non-monetary items being the same as Historical Cost items. Contrast with variable real value non-monetary items. Define + examples + how valued and updated. Show as sub-classes of non-monetary items. Define monetary and non-monetary items.

The two components of inflation: monetary and non-monetary component.

Not sure that this paragraph should be in article:

"There is a current movement to use inflation accounting to revoke the very destructive effects of the combination of inflation and the global 700 year old stable measuring unit assumption. Also to make people in general and especially the accounting profession aware of the very destructive effects of the stable measuring unit assumption in the world economy. It is intended to use the very successful revoking of the stable measuring unit assumption by Brazil during the period of their Unidade Real de Valor for this purpose. This may eventually lead to the very desired end of the Historical Cost paradigm which the accounting profession has been unable to successfully resolve for the last 70 years. (quote Kapnick Saxe lecuture over here.)"

Comments?

Important additions to be made:

(1) Dollarization of company accounts for company specific inflation accounting

(2) Dollarization of a country´s economy for economy wide inflation accounting - being low inflation economy.

Nicolaas J Smith 12:59, 16 July 2007 (UTC)

Just notes
The Brazilian monetary authorities at the time unknowingly reintroduced the very destructive stable measuring unit assumption when the URV was converted into their monetary unit, the Real.

Nicolaas J Smith 13:02, 16 July 2007 (UTC)

Real Value Accounting is one of the "general purchasing power accounting" versions of inflation accounting. Real Value Accounting is already being taught for several years as a subsidiary part of a university financial accountancy degree course in the USA. The subsidiary part´s title is listed in the university´s degree sylabus as Real Value Accounting.

I once came upon this course by complete chance on the internet. The course is/was given by a female professor. It was a few years ago that I came upon it. I never kept the link. I might now have to find it.

It was not directly linked on google at all. It is completely hidden away deep inside the course details. I came upon it by complete chance. Now I it is quite important to find it again to prove that Real Value Accounting is something that is generally accepted at that university for some time already.

I think they just use the name for a general purchasing power accounting method. The comprehensive Real Value Accounting practice is very much more complete and also has the dialy update part.

Only comprehensive Real Value Accounting and the Brazilian URV actually revoke the stable measuring unit assumption on an economy wide basis. The Brazilians did not even know that they were doing it. That is why they unwittingly reintroduced the stable measuring unit assumption when they converted the URV to the Real.

Not a single one of all the other inflation accounting versions revokes the stable measuring unit assumption completely in the economy. They are all simply just incomplete fancy financial reporting methods like IAS29. That´s all. That is why they have all failed in the past and that is why IAS29 is so ineffective.

The only ones that succeeded were dollarization at Auto-Sueco(Angola) and other company dollarizations and the URV.

Of course, low inflation only fails to revoke the stable measuring unit assumption in the whole economy to the extent of the rate of inflation. Inflation may only be on average 2% world wide but when that combines with the stable measuring unit assumption as implemented as part of the global Historical Cost Accounting model, it desroys hunderds of Billions of US Dollars just in the real value of Retained Income balances world wide in low inflationary economyies - year in year out - as it has been doing for the last 700 years. Obviously not so much in the beginning. Real Value Accounting fixes that or completes the revoking of the stable measuring unit assumption to 100%.

Nicolaas J Smith 13:08, 16 July 2007 (UTC)

Real Value Accounting
Geoffrey Whittington, the world´s top writer on inflation accounting uses the term "real terms accounting" more or less for what I call Real Value Accounting. Sureley that makes Real Value Acounting generally accepted? There isn´t a more credible third party reference than Geoffrey Whittington on generally accepted inflation accounting.

What do you think Foggy Morning? I will read all his references here in his book to "real terms accounting" and see where they correspond with similar principles in Real Value Accounting.

All I have to do is rewrite RealValueAcounting.com and call it Real Terms Accounting and it will be instantaneously generally accepted. I will have to see which principles are the same in both.

Nicolaas J Smith 15:33, 16 July 2007 (UTC)


 * Nicolaas, it looks like you're making good progress on this article! I agree that Wittington's book is probably the best reference to start off with. I'll see if I can get a copy.
 * You might want to take a few minutes to read Tutorial and Footnotes. I think that might help you with editing this article.
 * I don't know what to suggest about your book name. I think you'd have to get advice from a publisher about that. --Foggy Morning 14:35, 17 July 2007 (UTC)

Foggy Morning,

The Geoffrey Whittington reference:

I am sorry if I unwittingly maybe misled you here a bit about the cross reference to Geoffrey Whittington´s work. The only thing that is the same between what he describes as Real Terms Accounting and Real Value Accounting is the use of the Consumer Price Index to update non-monetary items in low inflation economies. That is all. What he refers to as Real Terms Accounting does not amount to revoking the stable measuring unit assumption which implies the abolishment of the Historical Cost paradigm. Nothing to that effect.

I am sorry if I perhaps misled you here. I did not mean to. I was meaning to refer only to the aspect that I undestood to be the same. But, I think it came accros incorrectly. I think you took it that Geoffrey Whittington sort of described a model very similar to Real Value Accounting. But that is not true. The only part that is the same is the use of the CPI to adjust items. That is all.

He describes Real Terms Accounting as a "system, which combines the useful features of both Current Cost Accounting and Constant Purchase Price Accounting." Page 11. Inflation Accounting. However, not one of the three systems revokes the stable measuring unit assumption as Real Value Accounting does.

Geoffrey Whittington has a very, very different approach to inflation accounting, like all other writers on the subject. They are staid Historical Cost accountants- the way all accountants are trained and how the, must be, trillion dollar accounting and auditing profession works. Their whole approach to accounting has always been and is now historical cost based. Real Value Accounting is a completely different state of mind. It is seeing everything in real values - never in historical cost values. Very, very different from the status quo.

I think the fact that a form of Real Value Accounting has been offered as a university course has to count to the concept of Real Value Accounting, namely, constant purchase price adjustment, being generally accepted. Certainly CPP is a very, very generally accepted inflation accounting term. That is a fact. There is no doubt about that. No one will object to the term constant purchasing price adjustment. They just want Historical Costs to remain. The idea of abolishing the Historical Cost paradigm is anathema to all accountants.

The main difference between the generally accepted CPP approach and Real Value Accounting is the concept of always updating everything to today´s real value. Basically the complete abolishment of the stable measuring unit assumption, which means the complete abolishment of the Historical Cost paradigm. That is the crucial difference. It boils down to a paradigm change. As I said before: this was not planned. It just happened like that. It popped out by itself.

A very important aspect of the difference between previous inflation accounting models and Real Value Accounting is brought about by the different definition of monetary items. Under Real Value Accounting monetary items can only be monetary. Nothing else. The opposite view actually believes that items like trade debtors and trade creditors are always monetary items. They have very complicated and convoluted ways of proving this. This view is then justified in their very complicated calculations of many items in their versions; especially their calculations of the net monetary gain or loss. They get really involved.

Whittington admits this in the way he states on Page 13: "The gearing adjustment is controversial, because it seems to some commentatores to be an uneasy mixture of the proprietary and entity concepts of capital maintenance."

Real Value Accounting simply says that monetary items can only be monetary. It is correct and net monetary gain or loss calculations are much, much simpler.

I was joking about changing the book´s name.

Nicolaas J Smith 15:23, 17 July 2007 (UTC)

The clear split in Real Value Accounting between constant real value non-monetary items and variable real value non-monetary items is most probably its single most important strength when compared to all the previous attempts at finding a correct inflation accounting model. Previous models do not make this split. Their analysis was thus complicated by the fact that they had the impossible task of defining standard valuation methods for both variable and constant real value non-monetary items bundled together - all in one. That was impossible for them and is still impossible as a result of the diffenent natures of variable and constant real value non-monetary items. You cannot have one standard valuation basis to value both equally.

I don´t know how I managed to split them correctly. It just happened. I think it may be a result of my ignorance of all the other approaches. I was thus not influenced or contaminated with those approaches.

Now it does not really matter. They are split correctly. I cannot explain and I certainly do not know or cannot recall how it happened. It just happened. It is impossible for me now to retrace my steps to find out how I did it. I only realise most of these things now as I understand more of the other sides work. I really feel that I was very lucky not to have read a single book about inflation accounting in the ten years I worked on the book. I only studied IAS 29 which is an accounting standard and does not analyse inflation accounting theory. The only inflation accounting book I read was Geoffrey Whittington' s. That was after I had already finished the final manuscript. I wanted to see if there was maybe something I missed. Meantime Whittington´s book has nothing about Real Value Accounting. Only the fact that the Consumer Price index is used to update non-monetary items. The term stable measuring unit assumption is not even mentioned once in his book. Nothing about revoking the stable measuring unit assumption. Whittington never states even once that the Historical Cost Accounting model destroys value. I have not seen that written anywhere else. The same as I have never seen written anywhere else that inflation has two components, namely a monetary and non-monetary compoment.

So, I don´t know how we will ever get these things into Wikipedia articles. Maybe it is the best just to wait another 100 years for them to become generally accepted.

It is really the identification of the stable measuring unit assumption as public enemy number one that makes the difference. That is critical. The other critical factor is the correct definition of monetary items. It is logical that it is critical. The whole question is what is a monetary item and what is non-monetary item. I also don´t know and I cannot describe how I got to that one. Maybe I never wrote the book. lol I can´t explain how I got to these concepts. I wil have to read the book again to see how I got there.

Nicolaas J Smith 00:03, 18 July 2007 (UTC)

General Purchasing Power Accounting Model
Inputs are required from editors with experience in this topic.

Nicolaas J Smith 00:04, 18 July 2007 (UTC)

Current Cost Accounting model
Inputs are required from editors with experience in this topic.

Nicolaas J Smith 00:03, 18 July 2007 (UTC)

Real Value Accounting finally seperated into its two parts under hyperinflation: both generally accepted.
Real Value Accounting

Foggy Morning, your name is sort of appropriate for this article. (Time for a joke!)

Inflation accounting was sort of foggy up to now. The fog is now starting to clear.

I must admit that I also did not study the Brazilian URV while I was writing the book. (lol, I did not study anything. Anyways, it is too boring to read hundreds of books that all seemed to be wrong in any case. Seems to me I tried to reinvent the wheel. Maybe I could feel that they were all wrong and that it was best to try and figure the problem out from the start or from basics. Maybe that was what happened.)

Anyway, the more I get to know about the URV the more it appears that the URV and Real Value Accounting is one and the same thing. Actually dollarization, the URV and Real Value Accounting are all one and the same model. See the article. The only really new part in Real Value Accounting is the daily update bit, that is, all non-monetary items in all economies are only valid when they are all updated to today´s real value. You can only look at any non-monetary item and correctly understand its real value, only when it is always updated to today´s real value. Historical values are of no use - never to be used. We only know what real value is today. We cannot put our beings and minds back in the past to comprehend past levels of real value using historical values. We have to update them to today´s real value to understand them and to interpret and use them correctly today.

That means that financial reports are only correct and valid on the period end date, that is, when they are prepared and consulted only on the period end date. When all items in a financial report about a period in the past are not updated to today´s real value, they are all wrong. They have to be updated to today´s real value to be valid and correct.

That means that hard copies of financial statements are only valid on the period end date. They are wrong after that date. Computerised automatically always-updated to today´s real value presentation is the best for financial reports.

In that sense, 98% of Real Value Accounting is already generally accepted in accounting and economic literature. Real Value Accounting and Real Terms Accounting were already generally accepted in the past as names for Constant (Current) Purchasing Power Accounting models. Whittington´s book is dated 1983. The other case is that university course in America.

So, Real Value Accounting is generally accepted and can enter Wikipedia as such. It is the same as dollarization and the URV, it has been lectured for years in America and it is generally accepted in accounting literature. That is, the CPP part.

Thus, the only not generally accepted part of Real Value Accounting is the part that I may have invented, the daily update part. I think it boils down to that.

I now feel very confident that I will be able to defend Real Value Accounting already being generally accepted as part of inflation accounting. The new part is not.

Well, maybe that is not the whole story. There are other novel, not yet generally accepted, parts to Real Value Accounting. They are the facts that it is applicable to all low inflationary economies and also in deflationary economies to eliminate the real value creation effects of the stable measuring unit assumption in deflationary economies.

So, now Real Value Accounting becomes a little more not generally accepted. The problem is that Real Value Accounting is a complete accounting model. It applies in all economic models. It is the natural next step in our fundamental model of accounting.

Now I see the real problem with Real Value Accounting: it is not just an inflation accounting model. It is a complete basic accounting model like the Historical Cost Accounting model. It is a comprehensive fundamental accounting model.

Thus: Real Value Accounting is a complete or comprehensive accounting model and not just an inflation accounting model. It has four parts or components.

1. The CPP part is its normal inflation accounting part excluding the daily update bit. The CPP part is not new at all. The CPP part is exactly the same as in dollarization and the URV. That part of Real Value Accounting is completely generally accepted and can enter Wikipedia. I can even enter it myself since I am not the originator/author of that part. That already existed for a very long time.

There is a problem with the fact that the use of the parallel rate to update constant real value non-monetary items under the Real Value Inflation Accounting model in hyperinflationary economies is not yet generally accepted.

On closer analysis I realised that the use of the parallel rate is actually generally accepted. The fact that the Brazilians´ Unidade Real de Valor had a 1:1 parity with he USD proves that.

So, the whole Real Value Inflation Accounting version is generally accepted. So, all of it is acceptable for Wikipedia.

2. The real value enabler or current or today´s real value part is new. That is not yet generally accepted.

I was wrong here too. The a new URV was calculated every day. So the daily update part is not new. That is also generally accepted as proven by the URV daily update.

3. The fact that Real Value Accounting is applicable in all low inflationary economies to stop the destruction of real value in all constant real value non-monetary items not fully or never updated in the low inflation world economy is the only part of Real Value Accounting not yet generally accepted under inflation.

It can also be said that both parts of Real Value Inflation Accounting are generally accepted under hyperinflation.

So, for inflation accounting purposes, the whole of Real Value Inflation Accounting is generally accepted. All of it can enter Wikipedia as generally accepted.

The fact that Real Value Accounting is to be applied in deflationary economies is also not yet generally accepted. This however is not applicable under inflation.

I think that´s it. That may be the whole story, so far.

I feel much better now. I don´t have to fight with Wikipedia anymore. I know what is generally accepted and what is not. That´s a relief. It was really a problem before I could seperate all the parts. Now I don´t think it will be so much of a problem

Nicolaas J Smith 10:34, 18 July 2007 (UTC)

I will have to look again at the way Real Value Accounting appears in the article; now with reference to its generally accepted and not generally accepted parts.

Real Value Accounting

Nicolaas J Smith 10:51, 18 July 2007 (UTC)

The solution
Real Value Accounting

Foggy Morning,

The more I work on the article the more it is coming right. But, I am understanding a lot more as we go along. It is almost like writing a book again.

The basic elements of the article are there but the presentation will change a lot:

There is only one inflation accounting model: CPP. All three models are exactly the same.

This is logical: the purchasing power of money is destroyed. one problem = one solution = cpp.

The big problem is the rate, the chaos in actual hyperinflation and the fact that the gov is against the rate and does not supply a single rate.

Dollarization, URV and RVA are all the same CPP model. The way each uses a different rate is the only difference among them.

The only novel element RVA brings to inflation accounting is the real value enabler.

RVA is the local currency side of dollarization. Nothing new at all. It all falls into place now.

The URV is the organized gov controlled, correct way. The dollarizatio/RVA combination is the solution when there is no official single rate. Dollarization/RVA are the two sides of the same thing. The one side USD - the other side the local currency or RVA.

It´s all just a big puzzle : like writing RVA was.

In an organized situation it is simple URV. No problem. The gov supplies the rate for the country. No gov rate is the big problem. (the gov is the enemy - happens in hyperinflation.  very clear in Zim now. the gov fights the market. the market always wins. the market = the people )

The OMIR case is very interesting.

That is also the reason there is no standard. The standard has to standardise daily updating. Without that, nothing works in hyperinflation. In hyperinflation daily updating is essential. You cannot do without it. It must thus be in the standard too.

Finally: to fix everything you need to fix everything: To stop the need for inflation accounting you need to ban the stable measuring unit assumption in low inflation economies. That is: end Hist. Cost. People have got to get used to updating everything in low inflation economies. In that way you will end imbalances in all economic modes.

If you get into monetary hyperinflation in the future with a system like that, there will be no imbalances because there will be no SMUA. No more Zimbabwe situation possible.

That is the jist of the article. Now it has to neatly written to bring all that out.

The short answer : SMUA = economic/public enemy number one. Answer: end HCA.

The biggest problem is the SMUA. The biggest problem in hyperinflation is that the gov is against the rate. Solve those two and you solve everything.

The fact that the gov is against the rate makes an international standard almost impossible - but that will be overcome.

Of course:

monetary inflation is something completely different. has almost nothing to do with the above. or : it actually has nothing to do with the above. it is monetary inflation.

all the above treats non-monetary inflation. two completely different things.

It´s crazy that this article has nothing to do with actual cash hyperinflation, isn´t it? But it is absolutely correct.

Another very clear proof that monetary inflation and non-monetary inflation are two very different items. The first being the result of an economic process and the second being the very destructive result of an accounting practice.

RVA is simply just the local currency accounting part of dollarization. The only novel part is the real value enabler.

Foggy Morning, I don´t know if you follow any of this.

Do you? Give me some indication. How much of this do you follow?

Successful country inflation accounting in the past:

1. URV in Brazil

2. Dollarization in Panama.

3. Dollarization in Equador.

4. Dollarization with German Mark in Yugoslavia

These are all really accounting solutions.

I don´t think the currency board in Argentina can be listed as successful. In the end it was a disaster.

Real Value Accounting

Nicolaas J Smith 05:27, 19 July 2007 (UTC)


 * Nicolaas, I can't follow all the edits you've made to this talk page or the article. Please see the article's edit history and talk page history to see the problem I'm encountering. The article's edit history is here and the talk page history is here. Did you read the information on WP:Tutorial? --Foggy Morning 03:34, 20 July 2007 (UTC)

Foggy Morning,

I would suggest that you just read the article as it stands at the moment. It is an article under construction often undergoing radical changes - back and forth.

Kindly edit the article.I accept the rules. The talk page is just background. Very confusing, I know. I can exclude the haphazard notes in the talk page - if you think that would be better. It does help to write them down. It sorts of deals with them - takes them out of their floating mode.

I am sure you will agree that this is still a very undefined and undecided subject or article at the moment.

I admire your interest in getting more order to the subject and getting it defined. What you are doing really is being a catalyst in the defining of what are really the basic principles driving inflation accounting and at the basis of inflation accounting and thus discovering what are actually generally accepted in inflation accounting taking into account the very conservative nature of the accounting profession, accounting taboos and generally implied generally accepted accounting principles - some very hidden and never discussed openly.

I would also appreciate other editors taking part.

It is a well known fact very well documented and discussed and written about that interest in inflation accounting rises and falls with the inflation rate in the major economies. I have seen papers just on the interest in inflation accounting - not on inflation accounting but the interest in inflation accounting. When world interest rates are low, as at the moment, there is very little interest in inflation accounting.

The only country in the world that would normally now be interested in inflation accounting would normally be Zimbabwe. I wrote an email to the president of the Institute of Chartered Accountants of Zimbabwe suggesting to him that his institute should take the lead in Zimbabwe to investigate very urgently the possibility of a Zimababwean Unidade Real de Valor. I copied the Big Four auditing firms in Zimbabwe, the IMF in South Africa and other accounting institutes in Zimbabwe. The president of the ICAZ gave me a call immediately after I sent him a second email to confirm receipt. That was last week. I have not yet heard anything more from him. We will have to wait and see.

I will fix the references.

Nicolaas J Smith 06:00, 20 July 2007 (UTC)

1. Dollarization of a company´s accounts
Dollarization of a company´s daily accounting and business practices in a hyperinflationary economy is a very successful form of inflation accounting that reduces non-monetary inflation to the level of the hard currency used. This is a very simple, easily implemented and very effective inflation accounting model available to companies in a high or hyperinflationary economy.

The critical requirement is that a company has to be able to update all its selling prices at the daily parallel rate. When a company can do that, it can dollarize the rest of its business. It will have no fear of hyperinflation. The rate would be immaterial to it.

It is such a simple, easily understood, easily implemented and very effective model that it could replace the flawed and ineffective IAS 29 as an International Accounting Standard.

It has an extremely low implementation cost

The stable measuring unit assumption and the Historical Cost model are 98% revoked under this model.

2. Unidade Real de Valor or Real Value Index Unit
The Brazilian Unidade Real de Valor practice was a very successful economy wide inflation accounting model.

The URV allowed Brazil to have a growing non-monetary economy while they still had monetary or cash hyperinflation in their monetary unit.

The URV eliminated non-monetary inflation in Brazil since it was a non-monetary reference unit used to maintain the real values of non-monetary items by updating their nominal values.

This model is in essence the same as the company dollarization model and the Real Value Accounting model.

The Brazilian URV was unique in the sense that it had two parts: 1. the stable non-monetary index part and 2. the final conversion of the URV into the monetary unit part.

Only the first part is required as a general case. The second part would be a general case only in circumstances very similar to the Brazilian case. If hyperinflation is much higher than the 2000% in the Brazilian case and if price indeces are not available for the construction of the index as in the case of Zimbabwe, then the case is simply a dollarization case.

When the country URV is calculated on the basis of country specific price indeces like in the Brazilian case, this model would revoke the stable measuring unit assumption and the Historical Cost Accounting 100%.

3. Real Value Accounting
The book "RealValueAccounting.Com - The next step in our fundamental model of accounting" by Nicolaas J Smith is available as a free download at the Social Science Research Network at

The specific intention of the Real Value Inflation Accounting practice for hyperinflationary economies is to stop the combination of hyperinflation and the stable measuring unit assumption from destroying the real values of constant real value non-monetary items in a company or an economy not fully or never updated as a result of the implementation of the Historical Cost Accounting model or any other accounting model that does not allow the continuous updating of all constant real value non-monetary items in terms of the current (today´s) parallel rate in an hyperinflationary economy.

The Real Value Inflation Accounting model also contains the daily updating element as implemented under the Unidade Real de Valor and the dollarization model.

Non-monetary items would be valued at today´s real value compliant with all current IASB International Standards excluding the stable measuring unit assumption, IAS29 and the definition of monetary items in IAS 21.

The basic underlying principles of Real Value Inflation Accounting for hyperinflationary economies are almost identical to those the Unidade Real de Valor and dollarization models were based on.

A "general purchasing power accounting" course, being taught as a secondary part of a university financial accountancy degree course in the USA, is listed in the university´s degree sylabus as Real Value Accounting. This course is not the same as the comprehensive Real Value Accounting model described above.

The stable measuring unit assumption and the Historical Cost model are revoked 100% under all versions of the Real Value Accounting model.

5 Dollarization of an economy.
Examples are of country dollarizations are Ecuador and Panama. Argentina had a currency board.

This model revokes the stable measuring unit assumption and the Historical Cost model 98%. This model implements the Real Value Accounting model 98%.

IAS 29

(Quote Dr Kucuksozen, head of Turkey´s International Accounting Standards Departement)

(Quote Dr Gustavo Franco, ex Governor of the Central Bank of Brazil and one of the creators of the URV)

Both these quotes are from private email correspondence and do not serve as sources of quotes - I am sure.

--

The company dollarization model, the Unidade Real de Valor model and the Real Value Accounting model are different versions of the same Constant Purchasing Power model. They differ in the choice of non-monetary index used to update constant real value non-monetary items. The dollarization model uses the hard currency as a direct substitute for a non-monetary index, the URV constructed its own non-monetary index while the Real Value Inflation Accounting model uses the parallel rate in hyperinflationary economies. The dollarization model revokes the stable measuring unit assumption and the Historical Cost model by 98% while the last two revoke them completely while they are in use.

The Brazilian Unidade Real de Valor stabilisation practice was a very successful inflation accounting model applied to a whole hyperinflationary economy.

Nicolaas J Smith 06:04, 20 July 2007 (UTC)

Further development needed
Nicolaas, let's develop this article further before trying to link it to other articles in Wikipedia. Have you read Wikipedia's policies, guidelines and procedures? --Foggy Morning 01:41, 23 July 2007 (UTC)

Foggy Morning,

Yes, I have read some of them, but I have not yet had time to read all of them.

Herbou 10:32, 23 July 2007 (UTC)

Foggy Morning, Do you want to tell Greensburger that what you have in the article is an actual quote from a book. He is changing the quote with his own euros for dollars and so on. Herbou 11:48, 23 July 2007 (UTC)
 * I've left Greensburger a message about this. --Foggy Morning 10:47, 24 July 2007 (UTC)

Foggy Morning, I removed all the links except the one in See Also about Real versus nominal value added by editor 65.78.212.145. Can you please ask that editor to remove the link. Thank you. Herbou 16:31, 23 July 2007 (UTC)
 * 65.78.212.145 is an anonymous editor, so I don't think sending a message will have much impact. The See also section is for listing closely related Wikipedia topics that are not mentioned and wikilinked inside this article. Real versus nominal value is a closely related topic that isn't wikilinked in this article, so I think the anon editor has a good point in including it. Why do you want it removed? --Foggy Morning 10:47, 24 July 2007 (UTC)

Only because you stated before:

"let's develop this article further before trying to link it to other articles in Wikipedia"

I think it and all the other links should stay. But, I thought you wanted all of them removed.

I simply just removed the links to please you. I am completely against it.

Linking is a new technology. Obviously it is much, much better to click on a word and see more detail about that concept - like in all other Wikipedia articles. I think it is crazy to remove all the links. But, I thought it better to co-operate with you. I´m totally against it. But, my ideas are not always Wikified or Wikible.

Herbou 11:05, 24 July 2007 (UTC)


 * The suggestion for wikilink policy is here. Short form summary: links are good; too many can make it hard to read (don't link every second word, link a given word or expression only once). Red ones are bad.--Gregalton 12:24, 24 July 2007 (UTC)

name change
Foggy Morning,

By the way, I am coming to understand the Wikipedia philosophy more and more.

I am from now on using the username Herbou that is not my real name. I can see the logic in not using your real name. When you use your real name you always have a Conflict of Interest since you are always promoting your own name and your own knowledge. It is better not to use your real name.

I am not a sock puppet of Nicolaas J Smith or Nicolaas Smith.

Herbou 10:05, 23 July 2007 (UTC)

I am going to ask for the username Nicolaas J Smith to be deleted. I just can´t find the rigth place to do it again.

It is better I do that so that I am not technically a sock puppet of Nicolaas J Smith - which I am at the moment.

Do you know where the link is to ask for the username Nicolaas J Smith to be deleted?

Herbou 10:50, 23 July 2007 (UTC)


 * Please see WP:Username. As for your point about agreeing with everyone else: there is no obligation to agree. There are policies to the effect that editors should write the articles so that they are neutral and cite references, avoid conflict of interest, etc. For example, find a notable, unrelated source that says there is non-monetary inflation with a definition. (As a side comment, it helps to use terminology that is widely used - non-monetary inflation is generally used to refer to inflation that is not caused by monetary expansion, for example by price shocks. Examples of this usage are here and here). At any rate, welcome and hope the wikification process is not too painful.--Gregalton 12:31, 23 July 2007 (UTC)

I read the WP rules on conflict of interest and agreed to leave. -   - Then Foggy Morning wrote this: -   - "Inflation accounting has not been generally accepted, but it HAS been widely discussed in published literature. That's important to comply with Wikipedia's policy on notability. I believe the topic is very notable. Now it's up to you and me and other editors to make it clear what inflation accounting is, why it's not used, and why it's something to think about. You can help make this happen in Wikipedia if you want to. I can't do it alone.   -    - Wikipedia is not a forum for biased activism, but all reasonable topics are welcome here. Inflation accounting is a reasonable topic to include here, and I think it should be included. If you can help in any way, your help is greatly appreciated." -   - I can stress again: I have agreed to leave Wikipedia. I am only here because of what Foggy Morning wrote.

At least someone has already said that inflation kills real value - without any connection to me.

Maybe Fisher said something about it in his 1911 book The Purchasing Power of Money. Suppose to be an important work.

Herbou 13:00, 23 July 2007 (UTC)


 * No-one is asking you to leave. Some - including Foggy Morning and others - are providing suggestions as to how to integrate content that accords with the basic Wikipedia approach. I also think that inflation accounting is an important subject, and should be included. If you would like a short example of how to make it fit the guidelines better, there is a phrase in a recent edit - "IAS 29 lacks credibility." That is an unreferenced opinion and has a notable point of view. If you find a quote from a notable source, for example, "Jacques Chirac says IAS29 is not credible because ...", that is a notable comment (although hopefully a better-known expert than the former French president could be found); even if it is not neutral, it is documented that it is a notable point of view. Foggy Morning noted that your linking was a bit overdone (too many makes the article hard to read, particularly when they are links to nowhere and end up in red); I for one appreciate that you took his suggestion constructively. This and other points are in the manual of style and WP:About. As for conflict of interest, simply find references that support your points, ideally from notable, authoritative sources. Unfortunately, that generally means from other people's articles/books rather than your own. Hope this helps, and again, welcome.--Gregalton 13:15, 23 July 2007 (UTC)

IAS 29:

“Is [the hyperinflation in Russia what was] thought about by the IAS? [Or] with the move up or down [of exchange rates] and collapse of purchasing power and [the] national currency more something else? IAS 29 (was) not really developed with Russia in mind.” (interviewee at Russia's Ministry of Finance) Page 50

An underlying theme in the interviews with the Big Five firms and large Russian audit firms was that their clients preferred to assume the dollar was the functional currency and implement IAS 29 in that light (i.e. with no use of general inflation indices to restate accounts). The concern was that Russian financial statements prepared under IAS 29, using general price indices, were not '''informative for users. Some Big Five firms agreed with this assessment; some did not.''' Page 51

Some listed companies in Zim do not apply IAS 29 because of judgemental issues.

A senior Zim bank official critized IAS 29 severely.

Herbou 17:51, 23 July 2007 (UTC)


 * Excellent quote. The simple statement that "There is some concern that 'financial statements prepared under IAS29, using general price indices [are] not informative for users."ref etc. This is (in my view) more precise than a "lack of credibility," and the quote expresses a particular concern and issue with relative authority. Exactly how the shortcomings can be expressed neutrally in an article.--Gregalton 18:14, 23 July 2007 (UTC)

Bad faith editing can include deliberate disruption just to prove a point
Bad faith editing can include deliberate disruption just to prove a point = copied from Wikipedia policies.

I think it is important for all editors to avoid bad faith editing especially when another editor is working in good faith but may not know all the ins and outs of Wikipedia yet.
 * Oh, please stop the accusations of bad faith. There was an 'unreferenced' flag put on a section that was unreferenced. This doesn't say it's wrong, it simply says it's unreferenced. Just like it sounds. Provide references, rather than spending time writing these long accusations.--Gregalton 19:52, 25 July 2007 (UTC)

I did not make any reference to you.

Non-monetary inflation.
The book "RealValueAccounting.Com - The next step in our fundamental model of accounting" by Nicolaas J Smith is available as a free download at the Social Science Research Network at

Non-monetary inflation is fully explained in the above book. I am the author of the book.

Inflation has two components: monetary inflation or cash inflation and non-monetary inflation or historical cost accounting inflation.

A very credible reference for non-monetary inflation is the Brazilian Unidade Real de Valor.

"The Unidade Real de Valor, or URV (Portuguese, Real Value Unit), was a non-monetary reference currency"

"its intrinsic value was pegged to three price indices"



The URV is very unique because of the fact that it had two components which appear contradictory: (1.) It was a non-monetary index unit and (2.) it was eventually a currency.

The fact that it was pegged to three price indices made it a non-monetary unit. A price index adjusts - and this is where the non-monetary proof comes in - and can ONLY adjust NON-MONETARY items. So the URV was a NON-MONETARY index.

Secondly, in the very end, when it was not the non-monetary URV any more, it was converted into a currency.

In its non-monetary index state it was only a non-monetary index and never a currency - in that state during its life as the URV.

When it ceased to be the URV, it took on a new format, namey a currency which obviously is not non-monetary but monetary.

We are only looking at the real URV when it was a non-monetary index. That proves the existence of non-monetary inflation. Why is it non-monetary and not monetary. Only money is monetary. The inflation that destroys the real value of money is monetary inflation.

The inflation that destroys the real value of constant real value non-monetary items is obviously, logically and factually non-monetary inflation and not monetary inflation. Monetary inflation can only destroy the real value of money and other monetary items.

Non-monetary inflation destroys the real value of constant real value NON-MONETARY ITEMS that is why this inflation is NON-MONETARY INFLATION.

The proof is the fact that a NON-MONETARY index is used to adjust NON-MONETARY items to eliminate the NON-MONETARY inflation.

NON-MONETARY indices are used to eliminate NON-MONETARY inflation in NON-MONETARY constant real value NON-MONETARY items.

Monetary inflation cannot be eliminated with a NON-MONTARY index because monetary items cannot be updated. The only way to eliminate monetary inflation is a lower inflation rate.

The proof of non-monetary inflation is the existence of a Consumer Price Index. The CPI is a non-monetary index to adjust non-monetary items. That proves the existence of non-monetary inflation.

"The two main uses are: a measure of inflation, and the indexation (or evaluation) of wages, salaries, pensions or regulated or contracted prices." 


 * Rather than attempting to prove the point this way, why not just provide a reference that uses the phrase 'non-monetary inflation' in the sense that you are referring to?--Gregalton 19:48, 25 July 2007 (UTC)

It is generally accepted that the CPI is a non-monetary index.

Herbou 23:16, 25 July 2007 (UTC)

I have a reference from the Brazilian Central Bank. It is in Portuguese. I asked them for the formula they used for the URV. They sent me a reply stating that they have been using different indexation formulas since 1964 to "reduce the effects of unanticipated inflation on the non-monetary side of the economy". That is the translation of the highlighted part of their communication below:

From: cap.secre@bcb.gov.br

Prezado Senhor Nicolaas Não temos como fornecer, conforme solicitado, os detalhes exatos do indexador utilizado durante o período de alta inflação no Brasil. Vale esclarecer que, desde 1964, quando foi implementado o Programa de Ação Econômica do Governo - PAEG, vários mecanismos de indexação foram introduzidos na economia brasileira objetivando reduzir os efeitos da inflação não antecipada sobre o lado real da economia. Podemos destacar os mecanismos destinados à taxa de câmbio, aos salários e e à correção monetária de ativos financeiros. Ao longo da existência das ORTNs e de seus sucedâneos, por exemplo, os governos mudaram em diversas oportunidades as fórmulas de cálculo da correção monetária e trocaram várias vezes os índices de preços que eram utilizados no cálculo da mesma. Assim sendo, sugerimos uma consulta ao Ministério da Fazenda, que talvez possa fornecer o histórico dos indexadores utilizados no País. Atenciosamente, DEPEP/RJ

They thus indicate that there is a non-monetary and a montary side of the economy: two sides. They also indicate that they used a non-monetary index for 30 years to limit the effects of inflation on the non-monetary side of the economy (logically non-monetary inflation). Unfortunately they do not write the terms non-monetary and inflation together but they certainly link them in the same sentence and use them in the same way I use them.

If a person does not want to see something that is very clear then no-one can force that person to see it. I cannot force you to see it if you have made up your mind not to see it. I hope that is not the case.

I have had two communications from very credible sources in Brazil. On this second occasion they actually mention their version of "non-monetary inflation". I am sure when I start reading other works on inflation in Brazil and their 30 years of indexing then I may find the term "inflação não-monetária".

The book "RealValueAccounting.Com - The next step in our fundamental model of accounting" by Nicolaas J Smith is available as a free download at the Social Science Research Network at

Herbou 23:26, 25 July 2007 (UTC)


 * As noted, using a book written and published by yourself is not really a reference. And, while I don't claim to be a Portuguese speaker, I can figure out enough to note that "inflação não antecipada sobre o lado real da economia" could also be translated as 'reduce the effects of unanticipated inflation on the real side (sector) of the economy. In macroeconomics, the distinction is sometimes made between the 'real' economy and the 'financial' (monetary) part of the economy. See IS-LM ("Thus the IS schedule is a locus of points of equilibrium in the "real" (non-financial) economy") or, [] (in Portuguese) ("As curvas IS e LM. O esquema IS-LM resume os pontos de equilíbrio conjunto do lado monetário e do lado real da economia"). Since these points seem to coincide in both languages, I'm not convinced it means non-monetary in the sense you intend.
 * I can't, as noted, qualify as a Portuguese speaker, but since this is an English language article, finding a credible reference for the use of non-monetary inflation in the sense that you intend is the best way to make this a point worthy of inclusion.--Gregalton 11:02, 26 July 2007 (UTC)

Herbou 14:47, 26 July 2007 (UTC)


 * You use non-monetary inflation. The phrase does not appear to be in use in the sense you mean it except by you. I do not debate there are non-monetary items (although I'm not convinced that it is meaningful, that's another matter). I do not debate there is inflation. I question whether you can combine the terms and have it mean what you think it does. In addition, you provide a reference in another language that does not appear to say what you say it does.--Gregalton 14:57, 26 July 2007 (UTC)

Foggy Morning can you please indicate what you want referenced.
Foggy Morning can you please indicate what you want referenced.

Please let me explain the reason for the flag.

Some days ago I had the term non-monetary inflation in that section of the article.

Gregalton mentioned here in the discussion page as you can see above that non-monetary inflation is used in another context and he gave two links.

So, I took the term out.

Everything was fine.

Then I put the term non-monetary inflation back in that section of the article.

Gregalton immediately put the no references flag up.

He wants a reference for the term non-monetary inflation as you can see very clearly above. He asks for it specifically.

This is what Gregalton wrote above:


 * "Rather than attempting to prove the point this way, why not just provide a reference that uses the phrase 'non-monetary inflation' in the sense that you are referring to?--Gregalton 19:48, 25 July 2007 (UTC)"

a reference

"Dear Mr. Smith, As we have talked on the phone, you can find my interpretation about your book, attached to this e-mail. Please do not hesitate to contact for any point. Best regards, Cemal KÜÇÜKSÖZEN, Ph.D.

Head of Accounting Standards Department

Capital Markets Board of Turkey

Dear Nick Smith,

I examined your book and understood that Real Value Accounting™ is based on the continuous updating of non-monetary units in terms of the Consumer Price Index to today’s real value.

Theoretically, I totally agree with you. But, as you know, there is a trend toward the acceptance of International Accounting Standards and International Financial Reporting Standards issued by the International Accounting Standards Board all over the world. For example, the International Organization of Securities Commissions (IOSCO) recommends harmonization of national accounting standards with IAS and IFRS. Also, the European Union introduced the requirement that from 2005 onwards, all listed companies have to prepare their consolidated accounts in accordance with IAS and IFRS adopted for application within the European Community. Considering international developments and as a candidate country for full membership, Turkey has issued a communiqué involving all IAS and IFRS and began application of them from the beginning of 2005 (As you know, we began application of IAS 29 in 2003).

In this regard, we can change over to real value accounting when there is a change in IAS/IFRS toward real value accounting or there is a trend toward real value accounting all over the world.

Regarding to tax regulation, I want to emphasize that tax regulation required restatement of assets and liabilities according to inflation (in terms of IAS 29) for the date of 31.12.2003 but taxes were not taken according to restated values in 2003. In 2004, financial statements were restated and taxes were taken based on restated values. In 2005, tax authority declared that high inflation period has ended, so entities did not do restatement according to inflation in first, second and third quarter of 2005. At the end of 2005, both Board and tax authority will evaluate economic conditions again and decide whether there is a need to restatement according to inflation.

Lastly, you stated in your book “publicly held companies and capital market institutions must account for perhaps an estimated 80 percent of the Turkish economy”. Unfortunately, I couldn’t give such statistical information. Besides, I attached a file that includes information about market value of publicly held companies. As you can see in that file, total market value of publicly held companies is approximately $ 174.3 billion and market value of floating part is about $ 54 billion. Total portfolio value of the investment funds is about $ 20 billion where brokerage firms have an estimated market value of $ 2 billion.

On the other hand, I can say that when there is hyperinflation in terms of IAS 29, with some exceptions (small firms), most of the Turkish companies have to restate their assets and liabilities according to regulation of the CMB and the tax authorities.

Best regards."

As you can verify, there is no such term in that section.

So, I took the term out of that section and, logically removed the flag too. The term was not there so, logically the flag is not needed.

Gregalton accepted that.

The term does not appear in that section where you have put the flag.

Foggy Morning, please now indicate which of the other terms in the section you want referenced since the term that the flag was put up for, is not there any more.

I don´t think you want every single word from the flag downwards referenced.

Please indicate what you want referenced since that term is not there now.

Or do you now agree to take the flag out since the problem is already sorted out?

Herbou 22:36, 25 July 2007 (UTC)


 * The entire section is unreferenced. As for non-monetary inflation, the article (higher up) says this: 'Inflation has two components: monetary inflation called cash inflation and non-monetary inflation called historical cost accounting inflation.' A reference would be helpful for what appears to be a central point of your analysis and definition.--Gregalton 14:53, 26 July 2007 (UTC)

"Dear Mr. Smith, As we have talked on the phone, you can find my interpretation about your book, attached to this e-mail. Please do not hesitate to contact for any point. Best regards, Cemal KÜÇÜKSÖZEN, Ph.D.

Head of Accounting Standards Department

Capital Markets Board of Turkey

Dear Nick Smith,

I examined your book and understood that Real Value Accounting™ is based on the continuous updating of non-monetary units in terms of the Consumer Price Index to today’s real value.

Theoretically, I totally agree with you. But, as you know, there is a trend toward the acceptance of International Accounting Standards and International Financial Reporting Standards issued by the International Accounting Standards Board all over the world. For example, the International Organization of Securities Commissions (IOSCO) recommends harmonization of national accounting standards with IAS and IFRS. Also, the European Union introduced the requirement that from 2005 onwards, all listed companies have to prepare their consolidated accounts in accordance with IAS and IFRS adopted for application within the European Community. Considering international developments and as a candidate country for full membership, Turkey has issued a communiqué involving all IAS and IFRS and began application of them from the beginning of 2005 (As you know, we began application of IAS 29 in 2003).

In this regard, we can change over to real value accounting when there is a change in IAS/IFRS toward real value accounting or there is a trend toward real value accounting all over the world.

Regarding to tax regulation, I want to emphasize that tax regulation required restatement of assets and liabilities according to inflation (in terms of IAS 29) for the date of 31.12.2003 but taxes were not taken according to restated values in 2003. In 2004, financial statements were restated and taxes were taken based on restated values. In 2005, tax authority declared that high inflation period has ended, so entities did not do restatement according to inflation in first, second and third quarter of 2005. At the end of 2005, both Board and tax authority will evaluate economic conditions again and decide whether there is a need to restatement according to inflation.

Lastly, you stated in your book “publicly held companies and capital market institutions must account for perhaps an estimated 80 percent of the Turkish economy”. Unfortunately, I couldn’t give such statistical information. Besides, I attached a file that includes information about market value of publicly held companies. As you can see in that file, total market value of publicly held companies is approximately $ 174.3 billion and market value of floating part is about $ 54 billion. Total portfolio value of the investment funds is about $ 20 billion where brokerage firms have an estimated market value of $ 2 billion.

On the other hand, I can say that when there is hyperinflation in terms of IAS 29, with some exceptions (small firms), most of the Turkish companies have to restate their assets and liabilities according to regulation of the CMB and the tax authorities.

Best regards."

Making good progress
Herbou, you've put a lot of good information into this article. I'm sorry I haven't had as much time to work on it as you. I'll try to help out with some "wikifying" within the next few days (that just means using the standard WP:MOS format). I found an example of how a general price-level adjustment is done using a price index. This might help introduce readers to the subject, so I'll add it to the article, and I'd appreciate your feedback on the example.

Many readers will have no idea what inflation accounting is, so the lead section (before the table of contents) should be a simplified overview of the main points in the article. There are quite a few guidelines and policies in Wikipedia, and nobody learns them quickly. I doubt very many people know them all! :)) I'll try to help out here with what I know, and others will probably come help, too. It takes time.

Please do not take editorial changes personally. Do you remember the user who made a change to a quote in this article? You asked me to leave him a note about changing quotations, and I did. Do you think he intended to damage this article in any way? I doubt it. He just made a mistake -- probably didn't notice that it was a direct quotation. Everyone makes mistakes, and most people learn from them and move on.

Gregalton is online more than I am, and he can help you more than I can. He's got experience and can give you good suggestions for improving this article. When he puts an unreferenced tag on a section, he's letting you and other editors know that the section needs references. He's not attacking you. He's pointing out where the article needs improvement in order to be verifiable. Lots of articles in Wikipedia need improvement, but often editors don't realize what's needed to improve an article. He's trying to help you here with this article.

The article discussion page is for discussing the article with other editors -- asking a question, maybe asking if someone else has a reference for something you remember reading but can't find, maybe reaching a concensus on what qualifies as a good reference, maybe discussing the outline of the article. Discussion pages sometimes include long arguments about the what's in the article. But these arguments should never be personal attacks. Discuss or argue the facts in the article, but avoid attacking another editor or generally-accepted norms. Use facts and references to explain your points, especially if they are outside generally-accepted norms.

There are some policies in Wikipedia that are very strongly enforced -- but usually new editors are forgiven a lot of mistakes. This is the policy WP:Assume good faith. I assume you're here to help make Wikipedia a better encylcopedia. Gregalton assumes the same thing. But new editors, especially, can be rude without realizing they're being rude. And new editors can break a lot of rules without realizing they're doing it.

You've contributed a lot of good information here in a very short time, and gregalton and I are trying to help you "learn the ropes" in Wikipedia. Everything you've added to Wikipedia is saved in the encylopedia's history. It's not possible to permanently delete something here, it just goes into page history and user history files. Certain deletions by Administrators aren't viewable by others, but that doesn't mean they completely go away.

I don't mean to be preachy here, but you're an intelligent adult with a good heart. Please use both your heart and mind when you edit Wikipedia. Assume good faith, and also take time to learn the encyclopedia's policies and standards. You can help a lot of people understand inflation accounting if you're patient and work with other editors to do this. You can also help improve other articles in related topics that you understand well. And you can also contribute to unrelated articles by researching the topic and contributing information. Wikipedia is like that.

This article is getting better at a marvelous rate, but it's not yet a good article. I think it could be one in time. Someday it might be a featured article. Who knows?

Herbou, I asked you to work with me on this article because I believe it's an important topic for Wikipedia -- and you know this topic, whereas I'm in learning mode on this topic. But it's also important for you to understand how Wikipedia works. This article will probably succeed or fail based on the quality and completeness of its references. But the article can also slowly and painfully fail for being a battleground of article edits and talk page comments. You and I and gregalton know this doesn't help the article improve -- it just makes the article fuzzy and unstable.

I believe that your heart is in the right place... but that you're not applying your mind to this Wikipedia article. You have a good mind, Herbou. Use it here in Wikipedia, please.

Here are some basic rules for you to follow, for now: * Do not pretend you are someone you are not.
 * Do not change or delete talk page comments made by yourself or anyone else.

Foggy Morning,

By the way, I am coming to understand the Wikipedia philosophy more and more.

'''I am from now on using the username Herbou that is not my real name. I can see the logic in not using your real name. When you use your real name you always have a Conflict of Interest since you are always promoting your own name and your own knowledge. It is better not to use your real name.'''

I am not a sock puppet of Nicolaas J Smith or Nicolaas Smith. Herbou 10:05, 23 July 2007 (UTC)

I am going to ask for the username Nicolaas J Smith to be deleted. I just can´t find the rigth place to do it again.

It is better I do that so that I am not technically a sock puppet of Nicolaas J Smith - which I am at the moment.

Do you know where the link is to ask for the username Nicolaas J Smith to be deleted?

Herbou 10:50, 23 July 2007 (UTC)

Whether you admit it or not, most experienced editors and Administrators will know who you are. Accept your Wikipedia past edits and move on. With respect from your friend, --Foggy Morning 01:32, 26 July 2007 (UTC)
 * Give your daughter a kiss and tell her that you are working hard to make a better world for her. But don't forget that a better world isn't one man's dream or understanding, it's a place where human knowledge is shared and applied by many people.

Dear Mr. Smith, As we have talked on the phone, you can find my interpretation about your book, attached to this e-mail. Please do not hesitate to contact for any point. Best regards,

Cemal KÜÇÜKSÖZEN, Ph.D.

Head of Accounting Standards Department

Capital Markets Board of Turkey

Dear Nick Smith,

I examined your book and understood that Real Value Accounting™ is based on the continuous updating of non-monetary units in terms of the Consumer Price Index to today’s real value.

Theoretically, I totally agree with you. But, as you know, there is a trend toward the acceptance of International Accounting Standards and International Financial Reporting Standards issued by the International Accounting Standards Board all over the world. For example, the International Organization of Securities Commissions (IOSCO) recommends harmonization of national accounting standards with IAS and IFRS. Also, the European Union introduced the requirement that from 2005 onwards, all listed companies have to prepare their consolidated accounts in accordance with IAS and IFRS adopted for application within the European Community. Considering international developments and as a candidate country for full membership, Turkey has issued a communiqué involving all IAS and IFRS and began application of them from the beginning of 2005 (As you know, we began application of IAS 29 in 2003).

In this regard, we can change over to real value accounting when there is a change in IAS/IFRS toward real value accounting or there is a trend toward real value accounting all over the world.

Regarding to tax regulation, I want to emphasize that tax regulation required restatement of assets and liabilities according to inflation (in terms of IAS 29) for the date of 31.12.2003 but taxes were not taken according to restated values in 2003. In 2004, financial statements were restated and taxes were taken based on restated values. In 2005, tax authority declared that high inflation period has ended, so entities did not do restatement according to inflation in first, second and third quarter of 2005. At the end of 2005, both Board and tax authority will evaluate economic conditions again and decide whether there is a need to restatement according to inflation.

Lastly, you stated in your book “publicly held companies and capital market institutions must account for perhaps an estimated 80 percent of the Turkish economy”. Unfortunately, I couldn’t give such statistical information. Besides, I attached a file that includes information about market value of publicly held companies. As you can see in that file, total market value of publicly held companies is approximately $ 174.3 billion and market value of floating part is about $ 54 billion. Total portfolio value of the investment funds is about $ 20 billion where brokerage firms have an estimated market value of $ 2 billion.

On the other hand, I can say that when there is hyperinflation in terms of IAS 29, with some exceptions (small firms), most of the Turkish companies have to restate their assets and liabilities according to regulation of the CMB and the tax authorities.

Best regards."

"the only way to demonstrate that you are not presenting original research is to cite reliable sources that provide information directly related to the topic of the article, and to adhere to what those sources say."

I totally agree with you.

Cemal KÜÇÜKSÖZEN, Ph.D.

Head of Accounting Standards Department

Capital Markets Board of Turkey

Editing suggestion
Just a friendly suggestion: reading one or two larger edits rather than a series of small ones would be much easier. If the "preview" button is used, you can see how the text will look, check links, etc., and edit more effectively, and at the same time make it easier for others to use.--Gregalton 11:10, 26 July 2007 (UTC)

Let's review the core wikipedia policies.

 * 1) WP:NOR No original research. "Wikipedia is not the place for original research. Citing sources and avoiding original research are inextricably linked: the only way to demonstrate that you are not presenting original research is to cite reliable sources that provide information directly related to the topic of the article, and to adhere to what those sources say."
 * 2) WP:Verifiability "The threshold for inclusion in Wikipedia is verifiability, not truth. "Verifiable" in this context means that any reader should be able to check that material added to Wikipedia has already been published by a reliable source."
 * 3) WP:Citing sources "Wikipedia:Verifiability, which is policy, says that attribution is required for direct quotes and for material that is challenged or likely to be challenged. Any material that is challenged and for which no source is provided may be removed by any editor."
 * These are the basic tests for what counts as original research, what is verifiable, and what counts as cited sources. What you have added does not appear to meet these tests, as pointed out by you above and on several occasions. You've been given plenty of opportunity to read the policies, and to edit your text to correspond to that. And it remains original research, unverifiable, and unsourced. On top of that, you have consistently violated other rules, like WP:No personal attacks and been banned for that (and returned to repeat those violations, as can be seen in the history files).
 * Please also see WP:What Wikipedia is not: "Wikipedia is not a place to publish your own thoughts and analyses or to publish new information." Simply put, it appears that this is the wrong place for publishing this work. All the rest is pointless drama.--Gregalton 18:05, 26 July 2007 (UTC)


 * I'm afraid there must have been misinterpretation: being invited, nicely, to contribute was certainly never intended to exempt you from the basic wikipedia approach and policies.
 * As for most of what you've written above, it clearly has nothing to do with what I've written. I just asked you for references, and you've reacted as if I had personally dismantled Zimbabwe.--Gregalton 19:20, 26 July 2007 (UTC)

a reference ?

Interpretation about your bookStandard Header|Full Message ViewCemal KÜÇÜKSÖZEN <--@spk.gov.tr>ViewMonday, October 17, 2005 12:11:15 PMTo:realvalueaccounting@yahoo.com Cc: RealValueAccounting Com(The Book) Nick Smith Not.doc (27KB); Market Cap-Float Ratio As of 30 Sept.xls (61KB) Find:

"Dear Mr. Smith, As we have talked on the phone, you can find my interpretation about your book, attached to this e-mail. Please do not hesitate to contact for any point. Best regards, Cemal KÜÇÜKSÖZEN, Ph.D.

Head of Accounting Standards Department

Capital Markets Board of Turkey

phone: +90 (312) 292 80 50- 51

fax    : +90 (312) 292 90 00

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Dear Nick Smith,

I examined your book and understood that Real Value Accounting™ is based on the continuous updating of non-monetary units in terms of the Consumer Price Index to today’s real value.

Theoretically,

I totally agree with you.

But, as you know, there is a trend toward the acceptance of International Accounting Standards and International Financial Reporting Standards issued by the International Accounting Standards Board all over the world. For example, the International Organization of Securities Commissions (IOSCO) recommends harmonization of national accounting standards with IAS and IFRS. Also, the European Union introduced the requirement that from 2005 onwards, all listed companies have to prepare their consolidated accounts in accordance with IAS and IFRS adopted for application within the European Community. Considering international developments and as a candidate country for full membership, Turkey has issued a communiqué involving all IAS and IFRS and began application of them from the beginning of 2005 (As you know, we began application of IAS 29 in 2003).

In this regard, we can change over to real value accounting when there is a change in IAS/IFRS toward real value accounting or there is a trend toward real value accounting all over the world.

Regarding to tax regulation, I want to emphasize that tax regulation required restatement of assets and liabilities according to inflation (in terms of IAS 29) for the date of 31.12.2003 but taxes were not taken according to restated values in 2003. In 2004, financial statements were restated and taxes were taken based on restated values. In 2005, tax authority declared that high inflation period has ended, so entities did not do restatement according to inflation in first, second and third quarter of 2005. At the end of 2005, both Board and tax authority will evaluate economic conditions again and decide whether there is a need to restatement according to inflation.

Lastly, you stated in your book “publicly held companies and capital market institutions must account for perhaps an estimated 80 percent of the Turkish economy”. Unfortunately, I couldn’t give such statistical information. Besides, I attached a file that includes information about market value of publicly held companies. As you can see in that file, total market value of publicly held companies is approximately $ 174.3 billion and market value of floating part is about $ 54 billion. Total portfolio value of the investment funds is about $ 20 billion where brokerage firms have an estimated market value of $ 2 billion.

On the other hand, I can say that when there is hyperinflation in terms of IAS 29, with some exceptions (small firms), most of the Turkish companies have to restate their assets and liabilities according to regulation of the CMB and the tax authorities.

Best regards."

---

Gregalton And it remains original research

Wikipedia policy: "the

only

way to demonstrate that you are not presenting original research is to cite reliable sources that provide information directly related to the '

topic

of the article', and to adhere to what those sources say."

a reference ?

Wikipedia policy: "Wikipedia is not a place to publish your own thoughts and analyses"

I totally agree with you.

Cemal KÜÇÜKSÖZEN, Ph.D.

Head of Accounting Standards Department

Capital Markets Board of Turkey

---

Gregalton And it remains unverifiable

unverifiable ?

The book "RealValueAccounting.Com - The next step in our fundamental model of accounting" by Nicolaas J Smith is available as a free download at the Social Science Research Network at   ISBN 972-9060-06-1  Lisbon, Portugal

Wikipedia: Self-published material may, in some circumstances, be acceptable when produced by an established expert on the topic of the article whose work in the relevant field has previously been published by reliable third-party publications.

---

Gregalton And it remains unsourced

unsourced ?

The book "RealValueAccounting.Com - The next step in our fundamental model of accounting" by Nicolaas J Smith is available as a free download at the Social Science Research Network at   ISBN 972-9060-06-1  Lisbon, Portugal

Wikipedia: Self-published material may, in some circumstances, be acceptable when produced by an established expert on the topic of the article whose work in the relevant field has previously been published by reliable third-party publications.

---

previously been published by reliable third-party publications ?

 Peer-reviewed ? 

- Original Message From: Willi Coates  To: realvalueaccounting@yahoo.com Cc: Graham Terry ; Raina Julies ; Hajira Ismail ; hhickey@anglogoldashanti.com Sent: Tuesday, July 10, 2007 3:02:03 PM Subject: FW: Complaint - ASA (Accountancy SA) - ASA

Dear Mr. Smith

Thank you for the complaint posted on the SAICA website dated the 01st and 09th July regarding the publication of your article addressed to our Chairman Ms Hester Hickey.

Firstly let me apologise for the article not being published on the initial agreed upon date and issue as well as with the lack of feedback by the editor on the status of your article. I have addressed your complaints with the editor and indicated to her the unacceptable omission of not keeping you informed of the publishing status of the article.

I do wish to draw your attention to the Accountancy SA editorial policy (herewith attached for your convenience) as it pertains to the Editor reserving the right to withdraw any material from publication. This is standard publishing practice and while the Editor is not in the habit of doing so, special circumstances surrounding this matter, not outlined in your complaint, resulted in your article  not appearing in the communicated  issues. (The article was pulled due to space constraints after an important late submission from a SAICA committee member writing on a subject with a shelf-life priority).

The article you submitted then went for a 2nd peer review to ensure that it’s own shelf-life and or accuracy/relevancy of information for a subsequent print date which was then sent through to you, and received back in June. Due to this, the next available issue date the article could be scheduled for is the September 2007 issue of ASA.

I also further humbly submit that announcing future publication dates will always be a risky undertaking as all publications reserve the right to withdraw material from publication.

Your article has now been included in the September issue which occurance I will personally monitor so that this publication date will be adhered to.

I trust that my response goes some way to alleviate the justifiable concerns outlined in your complaint. We will strive to improve our communication to contributors to a far better level than was the case in this instance.

Yours sincerely,

Willi Coates.

Publisher: Accountancy SA

Article to be published in the September 2007 issue of Accountancy SA. Article originally approved for publication in March 2007 issue.

Strap		Feature

Headline	Unpacking the Audit Report Blurb		Should the Audit Report specify the value destroyed in Retained Income by the implementation of the stable measuring unit assumption? Author		Nicolaas Smith

Word Count

“In most countries, primary financial statements are prepared on the historical cost basis of accounting without regard either to changes in the general level of prices or to increases in specific prices of assets held, except to the extent that property, plant and equipment and investments may be revalued.” ¹

The International Accounting Standards Board (IASB) only recognizes two economic items:

1.) Monetary items defined as “money held and items to be received or paid in money;” and

2.) Non-monetary items: All items that are not monetary items.

Non-monetary items include variable real value non-monetary items valued, for example, at fair value, market value, present value, net realizable value or recoverable value.

They also include Historical Cost items based on the stable measuring unit assumption.

One of the basic principles in accounting is “The Measuring Unit principle: The unit of measure in accounting shall be the base money unit of the most relevant currency.

This principle also assumes the unit of measure is stable; that is, changes in its general purchasing power are not considered sufficiently important to require adjustments to the basic financial statements.” ²

This makes these Historical Cost items equal to monetary items in the case of companies´ Retained Income balances and the issued share capital values of companies with no well located and well maintained land and/or buildings or other variable real value non-monetary items able to be revalued at least equal to the original real value of each contribution of issued share capital.

Retained Income is a constant real value non-monetary item valued at Historical Cost which makes it subject to the destruction of its real value by cash inflation – exactly the same as in cash.

It is an undeniable fact that South Africa’s functional currency’s internal real value is constantly being destroyed by cash inflation in the case of our low inflationary economy, but this is not considered important enough to adjust the real values of constant real value non-monetary items in the financial statements - the universal stable measuring unit assumption.

The combination of the Historical Cost Accounting model and low inflation is thus indirectly responsible for the destruction of the real value of Retained Income equal to the annual average value of Retained Income times the average annual rate of inflation. This value is easy to calculate in the case of each and very company in South Africa with Retained Income. It is also possible to calculate this value for all companies in the world economy with Retained Income.

It is broadly known that the destruction of the internal real value of the monetary unit of account is a very important matter and that inflation thus destroys the real value of all variable real value non-monetary items when they are not valued at fair value, market value, present value, net realizable value or recoverable value.

But, everybody suddenly agrees, in the same breath, that for the purpose of valuing Retained Income - a constant real value non-monetary item - the change in the real value of money is not regarded as important to update the value of Retained Income in the financial statements. Everybody suddenly then agrees to destroy hundreds of billions of Dollars in real value in all companies´ Retained Income balances all around the world.

Yes, inflation is very important!

All central banks and thousands of economists and commentators spend huge amounts of time on the matter. Thousands of books are available on the matter. Financial newspapers and economics journals dedicate thousands of columns to the fight against inflation.

But, when it comes to constant real value non-monetary items, it doesn’t seem as if inflation is important. We happily destroy hundreds of billions of Dollars in Retained Income real value year in year out.

However, when you are operating in an economy with hyperinflation (perhaps only Zimbabwe at the moment with 3 713% inflation), then we all agree that you have to update everything in terms of International Accounting Standard IAS 29 Financial Reporting in Hyperinflationary Economies. You have to update variable AND constant real value non-monetary items.

But, ONLY as long as your annual inflation rate has been 26% for three years in a row adding up to 100% - the rate required for the implementation of IAS 29.

Once you are not in hyperinflation anymore, for example, 15% annual inflation for as many years as you want, then you are not allowed to update constant real value non-monetary items any more. Then you must destroy their real value again – at 15% per annum. Or 7.0% per annum in the case of South Africa (April 2007).

For example:

Shareholder value permanently destroyed by the implementation of the Historical Cost Accounting model in Exxon Mobil's Retained Income during 2005 exceeded $4.7bn for the first time. This compares to the $4.5bn shareholder real value permanently destroyed in 2004 in this manner. (Dec 2005 values).

The application by BP, the global energy and petrochemical company, of the stable measuring unit assumption in the accounting of their Retained Income resulted in the destruction of at least $1.3bn of shareholder value during 2005. (Dec 2005 values).

Royal Dutch Shell Plc, a global group of energy and petrochemical companies, permanently destroyed $2.974 billion of shareholder value during 2005 as a result of the application of the stable measuring unit assumption in the accounting of their Retained Income. (Dec 2005 values).

Should this value be reflected in the financial statements? Maybe it should.

Footnotes

¹ International Accounting Standards Committee, (1995), International Accounting Standard 1995, London, IASC, Page 502 ² Paul H. Walgenbach, Norman E. Dittrich and Ernest I. Hanson, (1973), Financial Accounting, New York: Harcourt Brace Javonovich, Inc. Page 429.

--

 Comment letter to The International Accounting Standard Board - Draft Technical Correction 1, Proposed Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates, Net Investment in a Foreign Operation

CL 26

From: RealValueAccounting.ComTheBook [realvalueaccounting@yahoo.com]

Sent: 31 October 2005 20:27

To: Commentletters

Subject: Comment regarding DTC 1

RealValueAccounting.Com Rua Adriano Jose da Silva, 19 S/C Dto 2770-006 Paco de Arcos Portugal Tel +351 91 838 69 74

Email: RealValueAccounting@yahoo.com www.realvalueaccounting.com

31 October 2005

Patrina Buchanan Project Manager International Accounting Standards Board 30 Cannon Street London EC4M 6XH United Kingdom

Dear Patrina Buchanan,

Re: Draft Technical Correction 1, Proposed Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates, Net Investment in a Foreign Operation.

Comment to Question 1:

I do not agree with the proposals in DTC 1.

My comments relate to paragraphs 15 and 33.

In both paragraphs the term monetary item is used in relation to foreign exchange values. Foreign exchange values are not monetary items but non-monetary items in terms of the definition of monetary items being functional currency units held and accounted monetary values only of the functional currency and not of nonmonetary items expressed in terms of units of the functional currency.

Monetary items pertain only to money and monetary values. A monetary unit has three functions in an economy, namely medium of exchange, store of value and unit of account. A unit of foreign currency does not fulful all three functions of money in the internal economy. A monetary unit´s real value is determined by the rate of inflation, hyperinflation or deflation as indicated by the change in the Consumer Price Index. A foreign exchange currency´s value is determined continuously in the foreign exchange markets.

The functional currency is the monetary unit of account of the principal economic environment in which an economic entity operates. The essential feature of a monetary item is that it is a functional currency unit or a functional currency value that only pertains to the functional currency. Actual monetary units cannot be updated and actual accounted monetary values are not updated. Monetary values have the exact same attributes as money held with the single exception that they are accounted monetary values and not actual bank notes or bank coins. A monetary item never has a micro-economic non-monetary base during its entire economic life in our modern economies where our functional currency has no intrinsic value. A monetary item cannot be the accounted value of a non-monetary item in any way or form in an economy with fiat money.

Non-monetary items have monetary values because they are accounted in terms of a monetary unit of account. Non-monetary items thus have monetary values but they are not monetary values in an economy where the functional currency has not intrinsic value.

The alternative I propose for the Board to consider is the following: Substitute the word monetary in paragraphs 15 and 33 with the word non-monetary. The reasons I propose this change are explained in the paragraphs above.

Respectfully yours, ´ Nick Smith

RealValueAccounting.Com(The Book)™: The next step in our fundamental model of accounting.

www.realvalueaccounting.com Mobile phone + 351 91 838 69 74 Skype: RealValueAccounting.Com RealValueAccounting.Com™ R. Adriano Jose da Silva, No 19 S/C Dto 2770-006 Paco de Arcos, Portugal Yahoo! FareChase

---

Gregalton  .All the rest is pointless drama. .

Gregalton  you have consistently violated other rules,

WP:No personal attacks - In a nutshell: Comment on content, not on the contributor.

Please note context removed
Unfortunately, the editing above has removed the context in which my comments were posted. Please note that understanding the context will, alas, require looking at the history files. Regards.--Gregalton 18:35, 27 July 2007 (UTC)
 * Gregalton, I've been watching that and know what you mean. I like this topic and would like to see it well-covered here in Wikipedia, but I don't think Nicolaas (or Herbou) is understanding the policies, procedures and etiquette here in Wikipedia. Can this article be moved to namespace for development? I don't know how to do that. The article has many good references and information, so I don't want to AfD it, but the article history and discussion history include many edits after-the-fact that make things especially fuzzzy on discussion pages.
 * I don't know how to solve this. But if Nicolaas/Hebrou and I could work on this article on a namespace page. Do you know how to make this sort of page for us to work on? I'm not sure how to do it, but I'd like to sort this out with Nicolaas/Hebrou and get something good in Wiki if possible ASAP. With Respect,--Foggy Morning 01:49, 28 July 2007 (UTC)

I agree to have all the content on this page returned.

Look what I found on the WP etiquette page:

"Remove or summarize resolved disputes that you initiated."

I suppose it is not etiquette to post that over here now.

I think that may be the reason I removed that content from this page. They have been resolved for me. I got them off my chest by writing them down. Then I removed them.

See, I am not so different from other Wikipedians.

I can see that Foggy Morning and Gregalton will not agree with this point of etiquette to remove resolved disputes.

With respect.

Nicolaas J Smith 10:45, 28 July 2007 (UTC)

Now you can get me banned as a sock puppet too.

I signed in as Nicolaas J Smith to ask again for that user to be removed.

Then I posted the above post forgetting to sign in as Herbou.

If they can just remove the username Nicolaas J Smith this obviously cannot happen. I asked repeatedly for them to remove Nicolaas J Smith. But it remains.

I won´t make the same mistake again. Just stay signed is as Herbou.

Nothing stops them from removing Nicolaas J Smith.

With respect

Herbou 11:05, 28 July 2007 (UTC)

Gregalton: With respect, please quote directly the Wikipedia policy that states that a direct reference is non-negotiable.
Gregalton: With respect, please quote directly the Wikipedia policy that states that a direct reference is non-negotiable.

Gregalton, with respect I wish to point out that the basis of you excluding items from Wikipedia is that you feel that another editor has to give a direct quote for a word or phrase like "inflation has two components". I do not see that is Wikipedia policy.

The topic of this article is not original research. Wikipedia states that a credible source has to refer to the topic of the article.

With respect,

Herbou 06:30, 28 July 2007 (UTC)
 * "The burden of evidence lies with the editor who adds or restores material. Material that is challenged or likely to be challenged needs a reliable source, which should be cited in the article." "Articles should rely on reliable, third-party published sources with a reputation for fact-checking and accuracy. Sources should be appropriate to the claims made: exceptional claims require exceptional sources." All from WP:VER. Claiming that inflation has a source/component that has not been identified by any other reliable economics (or related field) source is an exceptional claim.
 * That the topic "inflation accounting" is not original research is not under debate and not what I claimed or wrote. Your analysis of it appears to be. You may be "right", but, to quote again: "The threshold for inclusion in Wikipedia is verifiability, not truth."--Gregalton 06:58, 28 July 2007 (UTC)

"Claiming that inflation has a source/component that has not been identified by any other reliable economics (or related field) source is an exceptional claim."

I do not claim that. Dr. Cemal KÜÇÜKSÖZEN, Ph.D., Head of Accounting Standards Department, Capital Markets Board of Turkey has recognized it too. He states that he agrees totally with me. He has a better vantage point than most economists in low inflation economies because his country went through a period of hyperinflation and you generally learn much more then about inflation than in low inflation economies.

I claim that Dr Kucuksozen has also identified the fact that inflation has a second component, that his identification of that fact is verifiable and that he is an exceptional source.

The top Chartered Accountants at the South African Institute of Chartered Accountants who twice authorised my article for publication in Accountancy SA are third-parties with an exceptional reputation for fact-checking and accuracy.

With respect.

Herbou 07:36, 28 July 2007 (UTC)

I claim that The South African Institute of Chartered Accountants and the Head of the Accounting Standards Department, Capital Markets Board of Turkey are both exceptional third party sources.

With respect.

Herbou 07:43, 28 July 2007 (UTC)

I claim that their acceptance of my work is verifiable.

With respect.

Herbou 07:49, 28 July 2007 (UTC)

Gregalton, on a lighter note: In Zimbabwe they also find it difficult to accept what the Brazilians learnt in 1964 to accept, namely, that the economy has two sides, a monetary side that can be in hyperinflation, and a non-monetary side that can be stabilised with a non-monetary index like the Brazilian Unidade Real de Valor or can be left in Historical Cost like in Zimbabwe and then get destroyed, like Zimbabwe, by the Historical Cost accounting model - I know you disagree and will not admit that the Historical Cost accounting model destroys real value. Unfortunately many, many people in Zimbabwe have actually already died because of the fact that the Historical Cost accounting model destroys value.

If I can help them to stop the Historical Cost Accounting model in Zimbabwe then it will not only save their economy but it will also save some lives.

The Zimbabweans say I live in cuckoo land when I try and explain that to them.

I hope you also do not think I, Dr Kucuksozen and the South African Institute of Chartered Accountants live in cuckoo land recognizing something the Brazilians have recognized in 1964.

Although, I must sadly admit, that you and Foggy Morning will maybe in the end delete the article because you are going to prove that I do actually live in cuckoo land and that there is no second, or non-monetary side of the economy with non-monetary inflation as a name for the accounting process that destroys the real values of constant real value non-monetary items in that non-monetary economy that people find so hard to accept but was accepted by the Brazilians in 1964 notwithstanding that fact that exceptional, verifiable sources like Dr Kucukzosen and the South African Institute of Chartered Accountants agree with me.

That will not stop me from trying to get the Zimbabwean government, the present ZanuPF one or any new government in the future that everyone so much want, to implement a stable non-monetary index to stabilise the "non-monetary economy".

Gregalton, you will find many, many followers in Zimbabwe that will agree with you that the Historical Cost Accounting model cannot destroy value and that all the blame for what is happening in Zimbabwe can be placed with Mugabe and ZanuPF. I am not a ZanuPF apologist but I know that they and Mugabe are responsible for monetary hyperinflation, but, I also know that the Historical Cost Accounting model is responsible for the destruction of real value in their non-monetary economy because of a lack of a Brazilian style Unidade Real de Valor.

I suppose you will also join my detrators in Zimbabwe and agree with them that the Unidade Real de Valor is a theory and not a fact. And you will prove it.

I write here about Zimbabwe, Gregalton, just to show you that this whole article and non-monetary inflation item is not about some cuckoo making the exceptional claim "that inflation has a source/component that has not been identified by any other reliable economics (or related field) source". There are real people dying because of this, there is a real economy being destroyed over the last 17 years of hyperinflation because of this.

Understanding these concepts correctly will make real difference. This is not just academic theory.

I am not blaming you for the dismantlement of Zimbabwe.

I am just trying to show that this work has direct application today. At this very moment I am also argueing the exact same points I am argueing with you, this very moment, on the NewZimbabwe.com forum in Zimbabwe. The exact same arguments. We could be almost on the same forum.

The people on the forum have mostly much, much less knowledge of economics and accounting. Unfortunately you make the same arguements against this article as they are making.

I am writing all this with great respect for you intellect and even greater understanding for you justified conservatism. That is all well and correct.

Just try and give reality a fair hearing too. I have worked in a hyperinflatinary economy and I know what is happening in Zimbabwe. I know this can make a difference. So I will carry on whether this appears on Wikipedia or not.

With respect

Herbou 08:51, 28 July 2007 (UTC)

Please note:

Wikipedia: Self-published material may, in some circumstances, be acceptable when produced by an established expert on the topic of the article whose work in the relevant field has previously been published by reliable third-party publications.

With respect

Herbou 13:53, 28 July 2007 (UTC)

Foggy Moring, with respect, please state what AfD is or stand for.
Foggy Moring, with respect, please state what AfD is or stand for.

With respect,

Herbou 06:32, 28 July 2007 (UTC)

Foggy Morning, I see that it means you want to nominate the article for deletion.

I think it is possible to have the article with the following:

All of my statements on the discussion page that I have deleted because I have changed my mind about what I said can be replaced.

That should sort out that problem. I only removed what I published before because I felt afterwards that I was being too direct with the truth and with facts and that I should state the same but in a more tactful way.

You can replace everything I have stated before.

I do not think it is reasonable to have an article deleted because statements have been removed but can be replaced on a discussion page.

The second point is that I wish to discuss in detail the points about No Original Research, verifiability and sourced items since self-published work can be allowed, my work will be published by a reliable source in September, although that should have been in March 2007, it has been peer reviewed twice by top accountants in Accountancy SA and that everything I wrote in my book is agreed to totally by the head of the Turkish International Accounting Standards Department who is a PhD and who went through a period of hyperinflation.

I do not know all the Wikipedia policies in detail. I think I my work is not original research although I have stated that before. When I now read the Wikipedia policies I can see that my work is not original research.

With respect,

Herbou 07:10, 28 July 2007 (UTC)

Foggy Morning, I wish to state that my discussing and disagreeing with Gregalton should not be taken as disruptive behaviour on my side in terms of Wikipedia policies on disruptive behaviour. I feel it is not disruptive behaviour. I hope you also see it like that and that you do not hold that as a reason to have the article deleted.

You may not see it as etiquette but it is part of normal behaviour to defend facts.

With respect.

Herbou 08:09, 28 July 2007 (UTC)

Gregalton: with respect, I have removed the phrase that inflation has two components from the article.
Gregalton: with respect, I have removed that phrase that inflation has two components from the article.

With respect.

It is a fact that inflation has two components, namely a monetary and a non-montary component and I have a verifiable, exceptional third party published source for it, namely, Dr Cemal Kucukzosen, the head of the International Accounting Standards Department of the Capital Markets Board of Turkey.

I remove the phrase to stop this editing war it is provoking. I hope you can accept the fact that the phrase do not appear in the article but only here in the discussion page and in a published book and properly verified and sourced as stated above.

It is now established with absolute certainty that a fact that is backed up by a verifiable, exceptional third party published source is being kept out of Wikipedia.

Wikipedia Policy: "The threshold for inclusion in Wikipedia is verifiability, not truth."

With respect.

Herbou 16:02, 28 July 2007 (UTC)

Wikipedia Policy: with respect "The threshold for inclusion in Wikipedia is verifiability, not truth."
Wikipedia Policy: with respect "The threshold for inclusion in Wikipedia is verifiability, not truth."

It is absolutely clear to me that what is happening here has absolutely nothing to do with Wikipedia Policy.

With respect.

Herbou 16:25, 28 July 2007 (UTC)

Foggy Morning, with respect, you have my full support to have the article deleted.
Foggy Morning, with respect, you have my full support to have the article deleted.

I have lost all my enthusiasm to work in this very hostile atmosphere created by Gregalton.

Luckily it is a big world and this work is appreciated in other spheres and not denigrated like over here. It is pleasant to do the same work somewhere else in a friendly and helpful atmosphere. I will apply my energies there and not here.

With respect.

Herbou 16:30, 28 July 2007 (UTC)

Gregalton: I apologise for my unkind behaviour towards you in the past.
Unfortunately I was not very kind to Gregalton in the past. He now justifiably holds this against me and against this article. I understand his view point.

Gregalton, I apologise for my unkind behaviour to you in the past here on Wikipedia. I am only human and I now apologise. I learn from my mistakes here on Wikipedia.

Herbou 10:57, 29 July 2007 (UTC)

Gregalton, the apology is not for you to agree not to delete the article.

You can still delete it.

I just feel I have to apologise for having been unkind to you.

Herbou 14:30, 29 July 2007 (UTC)


 * Thanks, I appreciate your note. I will be offline for several days, so good luck on the work with Foggy. I will put a few flags now to try to indicate the types of points that I think need to be referenced above all. Best,--Gregalton 02:27, 30 July 2007 (UTC)

This week
Herbou, I can spend more time this week working with you on this article. I think we might be able to fix it up together. If we can't, well, at least we both gave it our best shot! :)

I'll come here at least once a day to make edits for the next week. Gregalton might be putting a flag or tag on the article. If he does, DO NOT REMOVE THE TAG OR FLAG.

Do you want to work with me on this article this week? --Foggy Morning 20:51, 29 July 2007 (UTC)

Fine, let´s give it a try.

Can you please quote directly the Wikipedia policy on removal of tags and flags?

Herbou 22:17, 29 July 2007 (UTC)

That's a good question -- and I'm guilty of using Wikipedia jargon. I apologise! Tags or flags are actually template messages that are put on articles to suggest improvements, warn readers about possible problems with the article, or other sorts of comments on the article or a section of the article. That "Under Construction" tag (template message) you saw is an example of what many editors just call a tag or flag on an article. The "Under Construction" tag lets people know that the article is under very active editing, and it helps prevent two people from trying to change the article at exactly the same time (simultaneous edits to the database create "edit conflict" messages). The term "tag" or "flag" sometimes refers to a little thing like that an editor might put after a sentence to request a citation for the sentence. It appears in the article as a little "citation needed" after the sentence.

As far as removing tags goes, it depends on the circumstances whether it's okay to remove them or not. I didn't comment when you removed the "Under Construction" tag from this article, because it looked like you were the only editor actively working on this article at the time, and you can't get a database "edit conflict" with your own edits, as far as I know. Edit conflict messages can confuse new Wikipedia editors. Other tags have other meanings and are used in other ways. Usually the tag clearly states what editors need to do before removing the tag, but some tags are frequently misunderstood by editors -- especially new editors. I told you not to remove gregalton's tag -- if he puts one on this article -- because you're a new editor in Wikipedia, and you're working very hard on this article. Gregalton is worried that the information in this article might be inaccurate or biased, and he might want to let Wikipedia readers know about his concern. That's reasonable. And that's why I told you not to delete tags or flags from the article. When another editor places a tag on an article, it's rude to remove the tag without being certain the article has improved enough and no longer needs the tag. Active new editors often remove tags without really understanding the point of the tag. I told you not to do this because you are a new editor in Wikipedia. This is not Wikipedia policy, it's advice from me, Foggy Morning, to you, Herbou.

Don't forget that Wikipedia is a collaboration.

If you still want to give this a try, let me know, okay? I'm willing and eager if you are! --Foggy Morning 02:27, 30 July 2007 (UTC)


 * Yes, let´s carry on.

Herbou 06:04, 30 July 2007 (UTC)

Some suggestions
My final comment, and I don't know whether this is current (too many intermediate edits on the talk page), I don't think the email citation qualifies as a published reference, nor does an unpublished article (because it's unpublished...when it is published, that will be a different matter). And your own work is indeed self-published: the publisher is listed as RealValueAccounting. Rather than arguing over this, focus on what references you can find. I strongly suspect you will find references that make similar points, in more neutral language. I hope this helps - I underline again, this is meant to be constructive criticism.--Gregalton 03:44, 30 July 2007 (UTC)
 * Reduce use of the word 'destroy.' It does not add much, and is certainly not neutral.
 * Get rid of repetition. The same point seems to be made many times.
 * The article really should not say "this is proof..." and then "but no reliable citations can be found."
 * More info on how the current IAS29 actually works would be useful.
 * Reduce use of jargon e.g. "non real value monetary", etc. etc.
 * Avoid statements like "unfortunately". They sound biased.
 * Avoid generalisations like "no-one realises", "most accountants are unaware", etc.
 * Focus first and foremost on what can be explained and referenced, rather than trying to "prove" things. When statements can be referenced, there will be no need to "prove."
 * It may be easier to make progress by deleting sections and starting over rather than editing what is in some of these sections and the overall existing structure. Just my opinion.


 * The email reference is a very important reference. I don´t think it is reasonable to dismiss it with the statement:"I DON´T THINK the email citation qualifies." I think it is reasonable to find out for sure. If you wish to exclude it you have to quote Wikipedia policy on it. You fail to do that. I think it is reasonable to state that the email reference qualifies.


 * Wikipedia: Self-published material may, in some circumstances, be acceptable when produced by an established expert on the topic of the article whose work in the relevant field has previously been published by reliable third-party publications.


 * My work is self published and will only qualify on 1st September 2007 when my article will be published in Accountancy SA. The quote from Dr Kucukzosen: "I totally agree with you" is quoted on the book cover. So it will qualify on 1st September 2007 as part of my qualifying self-published work. It will qualify as an email reference and it will qualify as part of a qualifying self-published work. It will qualify twice.


 * I can wait till 1st September 2007 for the article to be published.


 * Wikipedia: Self-published material may, in some circumstances, be acceptable when produced by an established expert on the topic of the article whose work in the relevant field has previously been published by reliable third-party publications.


 * My self-published work will qualify on 1st September 2007 when my article will published in Accountancy SA.


 * I underline again that this is constructive discussion regarding this matter.

Herbou 06:32, 30 July 2007 (UTC)


 * I do not agree that it is best to delete a section and start over. It is best to edit the sections as they stand.


 * I underline again that this is constructive discussion regarding this matter.

Herbou 06:39, 30 July 2007 (UTC)


 * On deleting sections: I only suggest deleting sections to make the editing easier; simply my view as to how it would be easier to proceed.
 * I won't push the point on what counts as "published" for now, but simply register my view that they do not qualify (since this seems to be a sensitive point). But I would state the following: where a point that you're making depends only upon your work for supporting references, it would be better to be less categorical (since, if there are no other published sources that agree with your point, it is clearly not widely accepted). Best,--Gregalton 06:54, 30 July 2007 (UTC)

The head of the International Accounting Standards Department of the Capital Markets Board of Turkey may not be that well known but Dr Kucukzosen instantaneously understood every word I wrote in my book because of his intimate first hand knowledge of hyprinflationary conditions. Hyperinflation is very, very different, initially, from low inflation. Once you think in real values in stead of historical cost values it is much easier, of course.

Passing peer review by two different top South African Chartered Accountants at the South African Institute of Chartered Accountants does mean something.

Regards,

Herbou 07:34, 30 July 2007 (UTC)

Content discussion
Herbou - now that I've peppered the article with flags for references (and I hope that this will be taken as it is meant, an attempt to improve the article by making it neutral), and with true hope that you are open to questions/comments on the substance:
 * I have never had a problem with the retained earnings issue for a different reason than you have, which is that as a user I simply don't care about the artificial distinctions in the shareholders' equity part of the statements. Fundamentally, "equity" is a plug, that is, equity is what's left over after liabilities are subtracted from assets. What is important to me is how realistic (accurate in fair or real terms) the estimates of assets and liabilities are. If I need to adjust certain assets or liabilities, I can feed the changes I make into equity directly (call it a revaluation account).
 * When I have used IAS29 results, the major problem I have had using/interpreting the results (and why, except in some cases, I would prefer they be "naked" with no adjustments or simply stated in dollars) is that the restatement generally affects previous years. This makes any year-to-year comparison useless or extremely difficult. Put differently, the cure is worse than the disease - I can interpret (with some difficulty) the unadjusted figures, but cannot effectively interpret the adjusted figures, since it's a black box.
 * This gets much more complex, I admit, when looking at profit and loss statements. Even there, however, I'm somewhat comfortable adjusting the profit figures to allow for inflation (i.e. if inflation = 50% and "real" equity has increased by 50%, with no other changes, the company has essentially broken even).
 * For background, my usage of IAS29 has generally been in moderate-high inflation countries, i.e. well below the 8000% figure for Zimbabwe, more like 20-50% annually. Also, fortunately, I was generally reading them in a period of declining inflation, so there was the hope that the dratted IAS29 would eventually go away. I haven't any strong opinion on how to use them at hyperinflation levels (say, over 1000% annual).
 * And finally, I mostly agree with you that the easiest solution is to dollarize the accounts (or use some other benchmark/basket that is meaningful).
 * Another unrelated question: I may be daft, but I don't understand your point about CPI and other indices being non-monetary. Aren't all indices by definition non-monetary? (They are indices, not money). I must be missing something in what you mean here. Best regards,--Gregalton 06:35, 30 July 2007 (UTC)

Like most people I use the term inflation to refer to the effect of it and not the cause although the term semantically refers to the cause.

I think I was trying to show at the time that if non-monetary real value is being destroyed by "inflation" - the name of the cause being used to describe the effect - then that type of "inflation"/effect is logically called non-monetary inflation as opposed to the other component of inflation that destroys monetary real value and thus is called monetary inflation. Monetary and non-monetary inflation.

You are right, all price indices are non-monetary.

At the same time I feel no shame at all in admitting that I think I have not thought about it so directly and may not have conciously realised it up to the time when I was writing that. I feel no shame in admitting what I did not know or realise. I think it is because I am pleased with what I know and understand. There are many things I do not know or understand. I admit I am not a know-all.

Herbou 07:19, 30 July 2007 (UTC)


 * Ah, if only I knew it all :). Then partly the problem is semantics: since the terms monetary and non-monetary inflation are already used and reasonably well-known, I think it confusing to use them in a different way. For clarity, the usual sense of monetary inflation is that caused by an increase in the money supply (beyond what is "needed"), and non-monetary from other sources. The existence of the latter is under dispute, since the theory suggests that in the long term, other prices adjust (mid or short-term is perhaps accepted, and there is a real academic debate about how traditional measures of inflation may misstate inflation significantly, particularly if measures like "core inflation" are frequently used) - see this article for an example of the issue.
 * So, I'm at a loss to term what you're referring to, other than to say it would perhaps be clearer to separate the causes (using the terms monetary and non-monetary inflation) from the effect (erosion of the value of monetary and non-monetary items). Otherwise there is likely to be confusion amongst readers who are familiar with the usual use of these terms.
 * And a thought here, would "erosion" be acceptable instead of "destroy" in many places in the article text?
 * Another question: could you explain the mechanism by which the value is destroyed (eroded) in accounting? I don't mean to be a flaming pedant, but I have always approached accounting statements/systems as an estimate/"picture" of what is going on. As a result of this, the choice of the most appropriate tools to describe what is going on is different depending on the user (management vs tax vs shareholders, for example).
 * And a suggestion: there is a real issue with hyperinflation and tax accounting that would be very useful to illustrate. For example, a company in 1000% inflation might show taxable profit of a very large amount, resulting in a much higher effective tax rate on "real" (adjusted for inflation) results. This is a key point that would certainly be a valuable addition (section) in the article. Best, --Gregalton 07:42, 30 July 2007 (UTC)

The mechanism by which real value is destroyed in constant real value non-monetary items not fully or never updated is the stable measuring unit assumption as implemented as part of the Historical Cost Accounting model.

Cash USD 100 in the bank at 0% interest for a year with 10% annual inflation is paid out after a year as USD 100 but USD 10 in real value was destroyed. The same for USD 100 in retained earnings staying in the company and paid out a year later as USD 100 in a cash dividend. USD 10 in real value was destroyed in the real value of the retained earnings.

How the economy gets affected in low inflationary economies and destroyed in hyperinflationary economies because of that takes us one level further in understanding.

The combined efficiency of all the macro elements in the economy determines the net efficiency of the economy. The efficiency of each element, eg, investment or supply or demand or savings or capital expenditure or total corporate issued share capital or total corporate retained earnings or total tax revenue or whatever other macro economic element in the economy is critical in determining the combined efficiency of the economy. Economic distortions destroy the net efficiency of the economy as very evident in hyperinflation.

Take, for example, hyperinflation. I may have Zim$ 1 million in capital when the rate to the USD is 1/1. I buy stock for Zim$ 1 million. My banker lends my another Zim$ 1 million on the basis of my balance sheet. Inflation is 100% per month for 5 months in a row. I can sell my stock after 5 months at cost and pay myself a dividend of Zim$ 63 million. When I go to my banker after 5 months with my capital in my balance sheet - after the dividend payment to myself - he will again lend me Zim$ 1 million or USD 31 250. My business has shrunk a lot. This is also very evident in the shrinking of the internal market with the destruction of the real value of salaries in hyperinflation.

The Historical Cost model via the stable measuring unit assumption destoys real value in the actual macro economic elements. As a result of the massive distortions of hyperinflation it destroys the economy in a hyperinflationary environment and makes the economy less efficient in a low inflationary environment.

The net effect in a low inflationary economy is that the real value destroyed in retained earnings, for example, can be regarded as recovered in another time period in stock or property revaluations. So, it is actually destroyed in one account in one time period and my be recovered in the same or in another accounting period in another account. No net destruction of real value. But, in low inflationary economies it makes the economy less efficient. In hyperinflationary economies the extent of the distortions destroys the economy. Current example: Zimbabwe.

That actual real value is destroyed in retained earnings is not debatable. It is a fact. That real value is recovered in the same or other time periods in other accounts is also not debatable. It is a fact.

Another item that is also not debatable is the fact that the revoking of the stable measuring unit assumption is the same as the final stage of the actual Unidade Real de Valor just before it was converted into the Real currency: no real value is destroyed in any constant real value non-monetary item.

Revoking the stable measuring unit assumptionn will not make monetary hyperinflation impossible just like indexation by the Brazilians over 30 years did not stop hyperinflation immediately. The revoking of the stable measuring unit assumption will make hyperdistortions in the non-monetary or real economy impossible - all else except inflation being equal. As such it will make the hyper destruction of economies by monetary hyperinflation impossible. With the stable measuring unit assumption revoked the non-monetary economy will always be stable (like in Brazil) - all else except inflation being equal.

The actual destruction of real value in actual accounts by the stable measuring unit assumption is not debatable. That is a fact. That the destructed values "can be recovered" in other accounts is also not debatable. That is a fact too.

How exactly this factors into the destruction of the economy in hyperinflation and how exactly it factors into the level of efficiency of low inflation economies is obviously open to various possible explanations. These secondary effects are very complex, I am sure you will agree.

I advocate the revoking of the stable measuring unit assumption from an accountant´s point of view for very obvious reasons.

Herbou 10:20, 30 July 2007 (UTC)


 * Please, please, please: one. step. at. a. time. It really would make understanding your points easier.
 * Here's my simplistic understanding:


 * Imaginary world 1: there are no accounts. We never measure anything. We have no double-entry bookkeeping. I put 100 in the bank account (just as above). At the end of the year I still have 100, but now they are worth 90 (in "real" terms). Value eroded by inflation. I have lost $10, but don't keep profit and loss or balance sheet, so don't know how to express this. Because I think in dollars, I don't really appreciate I've lost money.


 * Imaginary world 2: I use historical cost. I lose the same $10, still don't know how to show this. I've lost the money still though. I still think in dollars, and don't appreciate my loss.


 * Imaginary world 3: Inflationary accounting, more or less IAS29: I still lost $10. This shows up as a loss of $10, probably under monetary adjustments or whatever that line is. I've lost $10, but now I have a name for it. This may or may not be helpful for me; not clear whether I think in dollars, quasi-constant value dollars, or some other unit (euros). It shows up in my P&L as a loss, and also shows up in retained earnings as a loss.


 * Imaginary world 4: I "euro-ize" my accounts. At the beginning of the year, dollar=euro. At the end of the year, dollar = .9 euros. It shows up in my profit and loss as a monetary exchange loss. I show a loss of 10 euros, retained earnings also hit.


 * Imaginary world 5: Unidade real. Corresponds exactly with IAS29, if done properly (that is, if the indices are the same). Corresponds with Euroized, if the euro here coincides with the index chosen.


 * Imaginary world 6: Real value. ??


 * Now to summarize: in all four cases I've "lost" ten constant value dollars. In the first two cases, I don't formally express this, but I've still lost the money; I may also not even be aware (or I might be aware and just not care enough to bother).
 * In the latter three cases, I've lost 10 units (call them what you like), and now I've formally expressed this. I can now identify exactly how much and (mostly) where and how - by having non-inflation hedged investments (cash).
 * But in all five cases, I've lost exactly the same amount, and in all five cases, the cause is the same: inflation.
 * Have I missed something here? And how does imaginary world 6 work?--Gregalton 11:53, 30 July 2007 (UTC)

You are working with monetary inflation only. This is all about the stable measuring unit assumption and how it affects constant real value non-monetary items, for example retained earnings or salaries.

Your examples are mostly all to do with monetary inflation. Please do examples in retained income or salaries.

Also remember that all losses are non-monetary items. Your net monetary loss originates in a monetary account, but, once you record it as a net monetary loss it is a non-monetary item and has to be updated. It is a loss because the monetary item money cannot be updated. But the loss itself is a non-montary item the moment it is recorded in the accounts and has to be updated like under IAS 29 too.

Foreign exchange is not the same as internal currency. Foreign exchange is a variable real value non-monetary item everywhere except in Panama, Ecuador and El Salvador.

Real Value is only about updating constant real value non-monetary items. Money cannot be updated under any accounting model.

Overall view: why did you choose a monetary inflation example when this is all about non-monetary inflation and the stable measuring unit assumption?

Now I will deal with your example line by line:

(1) Cash: Monetary inflation. You cannot update money. Everything just cash like a street vendor in Zimbabwe. They know never to keep ZimDollars but only stock or non-monetary items. Your valuation method is the inflation rate, the CPI. Your asset you hold is always automatically valued by inflation. (2) HCA: Still monetary inflation. The same as (1) because you use money that can never be updated under any system. HCA = stable measuring unit assumption but that is only used for constant real value non-monetary items. Your monetary item is still being automatically valued by inflation for you.

Only monetary inflation in this example. Because you use the HCA system non-monetary inflation will destroy your constant real value non-monetary items. You do not have any. Both monetary and non-monetary inflation are present in HCA model.

(3)IAS29: Your are thinking in constant dollars. Definitely not in Euros. In principle, the same as Real Value Accounting. You revoked the stable measuring unit assumption. Only of use to you to maintain the Net Monetary Loss´s non-monetary real value with updating this non-monetary loss at the CPI. RVA also has net monetary gains and losses just like IAS 29. Only under RVA and IAS 29 are the cost of inflation and the profit of deflation accounted. Unique attributes only found in those two models. You lost real value because of monetary inflation. There is no non-monetary inflation under this model. You maintain the real value of the Net Monetary Loss by updating it and preventing non-monetary inflation. The net monetary loss will be passed on to retained loss and you will maintain the real value of that retained loss forever - ceteris paribus.

So, here you have only monetary inflation. You can do nothing about the monetary inflation. You made non-monetary inflation impossible by revoking the stable measuring unit assumption. You employ a RVA concept by maintaining constant real values forever - ceteris paribus. (4) Under Eurized accounts you simply show everything in Euros using HCA. You implement the stable measuring unit assumption. In your Euro accounts your USD 100 is not money or your functional currency. Your functional currency is the Euro. You do not have any money in your B/S. You only have a variable real value non-monetary item called Foreign Excange. You simply value it as Euro 90. The loss is not a monetary exchange loss but a Foreign Currency exchange loss. You had no money for that year. You held a non-monetary item Foreign exchange. You have a loss like a loss in stock value. Same thing. You apply the stable measuring unit assumption by never updating your non-monetary item Loss on Foreign exchange. It´s real value is being destroyed by inflation all the time. The Loss on Foreign Exchange will be passed on to Retained Loss and inflation will destroy its real value over time till it reaches zero real value.

Here you have no monetary inflation at all. You only have non-monetary inflation in the continous destruction of the real value of the eventual Retained Loss till it reaches zero real value.

(5) URV: Corresponds with IAS 29 and RVA = you have revoked the stable measuring unit assumption. Not at all with Eurized accounts which are HCA = stable measuring unit assumption. The Euro is a monetary item and can not be used as a non-monetary index. URV=IAS29=RVA in principle.

Only monetary inflation. You stop non-monetary inflation by revoking the stable measuring unit assumption. I am not sure whether they had net monetary losses and gains with the URV.

(6)RVA = URV = IAS 29 in principle - not in detail. You revoke the stable measuring unit assumption. Net monetary loss is non-monetary item when recorded and then updated at the CPI to maintain its real value.

The money real value is destroyed by monetary inflation. The Net Monetary Loss is a non-monetary item and is maintained as such. When passed on to Retained Loss its real value is maintained forever - ceteris paribus - by updating it at the CPI rate.

Non-monetary inflation is impossible because the stable measuring unit assumption is revoked.

I hope this will help. This is thinking in real values instead of HC values.

Under your Eurized accounts inflation - as you see it - plays no role at all. Only the exchange rate difference. There you only have non-monetary inflation.

Herbou 13:32, 30 July 2007 (UTC)

Gregalton, I think that the simplest way to explain what I am trying to do is the following:

Verifiable reference by tird party source: There is a stable measuring unit assumption. The refence is in the article, Hanson et al.

Thus:

Inflation accounting is normal accounting without that assumption.

Surely, that is not a preposterous proposal. Let´s see what happens when we do not make that assumption. Is it necessary to make that assumption? I do not think so. That assumption´s removal is authorised by the IASB in the application of IAS29. The URV removed that assumption too. Low inflation almost removes that assumption. Dollarization reduces that assumption to USD inflation.

So, what´s the problem in removing it in all normal accounting? What are the benefits. One benefit comes to mind immediately: hyperinflation in constant real value non-monetary items will be impossible forever.

That is quite a benefit, don´t you think?

In a way I am trying to show that IAS29 authorizes everything I state since it authorizes the revoking of the stable measuring unit assumption.

I feel that the Hanson reference to the stable measuring unit assumption is one of the two references needed for this whole article.

The second reference is to IAS 29 that authorizes the revoking of the stable measuring unit assumption.

Those two references cover everything written in this article. No other references are required.

They show that there is such a thing as the stable measuring unit assumption and that the IASB authorized it being revoked.

In my opinion any first year accountancy or economics student can relate everything written in this article from those two references.

Herbou 15:50, 30 July 2007 (UTC)

Gregalton and Herbou, I said I'd try to help with this article this week, but this discussion is too general for me to feel I can offer any constructive assistance with the article this morning. Gregalton, could you archive older discussion? --Foggy Morning 14:01, 30 July 2007 (UTC)

Gregalton : All disputed content removed.
The Wikipedia policies state that disputed items without citations can be removed by any editor.

I have now done that and removed 100% of the disputed items. I am entitled to do this in terms of Wikipedia policies.

I think the last NPOV tag can also be removed as all the disputed items have been removed.

I think it will be completely unfair to carry on and on and on adding direct citation requests for every single word in the article and continuing disputing everything in the article. I may be wrong, but that is not the spirit of Wikipedia.

I think this article has now reached its final point as all disputed content has been removed.

Gregalton, I am sure you can pass the article now. It doesn´t say much now. In fact, it hardly says anything. So I am sure that will be acceptable to you. It now agrees with everything. It is now properly Wikified.

Herbou 20:33, 30 July 2007 (UTC)

The content I removed was all controvertial and not neutral viewpoints.

Please do not take this as vandalising the article. It is Wikifying it.

I suppose I have reached what you call editor fatigue.

Herbou 20:53, 30 July 2007 (UTC)

Gregalton, I think you personally learnt a lot about inflation accounting from this.

I think you are not able to share it with other people. That is why you were so unreasonable with so many tags and citation requests.

It is very obvious that putting so many requests up you have some other motive. I just find so many citation requests very questionable. I really think that was not reasonable behaviour.

You got carried away with the power you have. There is a saying: power cor......

Just my personal view.

Herbou 21:02, 30 July 2007 (UTC)

You really got carried away: you wanted a citation that the monetary unit of account is the only unit of account that is not stable. Everyone knows that. No-one questions that statement. It is a generally accepted fact of life. We all know that. Now you want a citation for that.

The was the last straw.

I have personally added that statement to the Unit of account article on Wikipedia. It was immediately accepted. Not questioned at all. The regular editor working on the Unit of account article immediately started including that in his general text.

You want a citation for it.

Herbou 21:20, 30 July 2007 (UTC)

Herbou 21:17, 30 July 2007 (UTC)

Foggy Morning, Thank you for the invitation, but I think theWikipedia rules definitely exclude me.
Foggy Morning,

Thank you very much for your kind effort on this article.

I am however convinced that the Wikipedia rules exclude me from working on any article about inflation accounting because of conflict of interest and neutral point of view.

Thank you again.

Nicolaas J. Smith.

Foggy Morning,

I am not contributing to Wikipedia any more.

First of all: I know something about inflation accounting. That excludes me from contributing to the article since I have a conflict of interest in wanting to add my knowledge about the article to Wikipedia on this subject.

Real Value Accounting principles and concepts are not original research. That is a fact. There is a Real Value Accounting course given at an American University

They have been accepted by a credible third party. This can be verified by anyone.

My self-published book is acceptable in terms of Wikipedia policy.

So, technically everything enters.

But, I am the author of this work. That excludes me from contributing this information.

Although everything enters technically, not one of the final solutions is generally accepted.

Wikipedia is about what is old and generally accepted and best contributed by editors completely unconnected to the article.

I should never add any content to any article that I know something of, like accounting. That is COI.

You and Gregalton should also not enter any content in articles about inflation accounting, accounting or economics, because you know something about it. Both of you have COI. You know something about those subjects.

I should add content to an article about the Japanese language, for example. That will be perfect for me as an unconnected editor. I can never even add one word to any article I know something about. That is how Wikipedia is suppose to work. Then there are no problems.

The best short summary to understand Wikipedia is: Wikipedia is not about facts but about being generally accepted for a long time. Wikipedia is only about generally accepted very old ideas. That is it.

All the underlying principles of Real Value Accounting, except one (never even mentioned in the present article), are generally accepted very old concepts. The final solutions of Real Value Accounting are accepted by verifiable credible third parties and published. The final solutions are not yet generally accepted. I am the author. So, I am excluded.

The only thing that works is the right way - like everything in life.

So, Foggy Morning, let´s not bluff ourselves. There is no place for me in Wikipedia as far as inflation accounting is concerned. The Japanese language, yes. But not inflation accounting.

We live and learn.

Foggy Morning, thank you very much for your well intentioned efforts.

With respect,

Nicolaas J Smith

PS: It is best to have the article deleted because the way it stands is not a true reflection of what inflation accounting really is.

NJS