Almot Maqolo, Staff Writer 
IN the wake of Zimbabwe’s recent introduction of a gold-backed currency, the Zimbabwe Gold (ZiG), to replace the inflation-ravaged Zimbabwean dollar, some in the accountancy profession are exploring a novel approach — triple reporting of financial results.
This innovative strategy aims to address the complexities and restore confidence in financial reporting during the ongoing transition.
The Southern Africa Association of Accountants’ past president, William Murinda, is one of the idea’s proponents.
“For the conversion from ZWL to ZiG, I think for 2024 we might need three sets of accounts… We need to do translations, we need to make adjustments.”
This structure would include reports for the period before ZiG, the transitional month, and the period after its adoption.
Kreston Zimbabwe’s Tinashe Murerekwa highlighted the need for a forward-looking approach, stating, “You have to be prospective in terms of adopting the ZiG and moving forward with accounts.”
The adoption of ZiG is seen as a bold move to stabilise Zimbabwe’s economy, which has long battled hyperinflation and currency instability. The country adopted a multi-currency regime in 2009, and the US dollar still dominates most transactions.
While public sector entities are mandated to use ZiG, private companies have the flexibility to choose between the US dollar and ZiG as their functional currency.
Traffic Safety Council of Zimbabwe’s audit and risk manager, Davison Mokina, explained: “For the private sector, depending on how their trade is with the public, they may choose the US dollar, or they may choose ZiG.”
The Institute of Chartered Accountants of Zimbabwe technical director, Owen Mavengere, encouraged companies to conduct thorough assessments before deciding, considering factors like sales prices and regulations. He noted that for entities already using the US dollar, “It’s just a matter of adding another foreign currency known as the ZiG.”
Despite the challenges, the transition to ZiG presents an opportunity for auditors to innovate and adapt their reporting practices. By exploring solutions like triple reporting, they can contribute to a smoother and more transparent financial landscape in Zimbabwe.
Zimbabwe has a long history of monetary instability, marked by hyperinflation and the introduction of multiple currencies. This move highlights the ongoing struggle to stabilise the economy and restore confidence in the local currency. The multi-currency regime adopted in 2009 allowed for the use of various currencies, including the US dollar, which currently dominates most transactions.
Reporting companies have persistently received adverse opinions on their books as a result of currency volatility and the challenges created by less than smooth transitions during currency shifts.
Last year, some companies had to shift to historical accounting due to difficulties complying with international standards for hyperinflation reporting. This stemmed from the country’s adoption of a blended consumer price index (CPI) as the official inflation benchmark.
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