Blended CPI: Fresh reporting challenges emerge

FIRST Capital Bank (First Capital) says it has had to temporarily resort to historical accounting only after failing to comply with the international accounting standard that pertains to hyperinflation reporting, due to Zimbabwe’s recent adoption of a blended consumer price index (CPI) as the official inflation benchmark.
It comes as reporting companies in the country have persistently received adverse audit opinions on their results since 2019, due to conflicts between standards and legislation.
“In Zimbabwe this year, we are operating at a blended CPI rate, which presents a challenge in the production of inflation accounting and exactly for that reason we are unable to comply with IAS 34,” managing director of First Capital, Ciaran McSharry, told shareholders at the bank’s extraordinary general meeting (EGM) recently.