‘Blended CPI inappropriate for accounting purposes’

16

THE Institute of Chartered Accountants of Zimbabwe (Icaz) says preparers of company results should not use the Zimbabwe National Statistics Agency (Zimstat)’s blended consumer price index (CPI) as it does not measure inflation in any particular currency.
Zimstat announced in August that it will now be publishing blended inflation and CPI, which it said entails merging the inflation for prices that are quoted in US dollars (US$) and inflation for prices quoted in Zimbabwe dollars (ZWL).

This follows the promulgation of Statutory Instrument 185 of 2020, which allowed entities to quote and sell goods and services in both US$ and ZWL.
“A blended inflation index is not appropriate in the preparation of inflation adjusted financial statements as the financials are prepared in a particular functional currency and not reported in a blended currency. Similarly, any inflation index should also be specific to the reporting currency,” Icaz said in a statement recently.