SEVERAL companies listed on the Zimbabwe Stock Exchange (ZSE) have been forced to defer publication of their financials for 2019 to allow for finalisation of reviews of inflation-adjusted financials by auditors in line with the new reporting standard – IAS 29.
BY FIDELITY MHLANGA
This comes after the Public Accountants and Auditors Board (PAAB) last year advised companies to adopt inflation-adjusted financials in line with the requirements of international financial reporting standards.
One of the affected firms, CFI advised stakeholders that its 2019 year-end financials would be released before the end of this month, a month behind their scheduled release.
“The board wishes to advise its stakeholders that its year-end financial results publication that were due for publication no later than December 31, 2019 have been deferred with approval by the ZSE to no later than January 31, 2020. This is to allow finalisation reviews of inflation-adjusted financials by the group’s external auditors,” said CFI group company secretary Panganayi Hare.
Falcon Gold and National Tyre Services also said they were still realigning their financials with the hyperinflation reporting standards.
“National Tyre Services limited hereby notifies its shareholders and other stakeholders that it has delayed the publication of the unaudited financial statements for the half year ended September 30, 2019. These were supposed to be published by December 31, 2019. The company will present inflation-adjusted financial statements as its primary financial statements and these are still undergoing the necessary review processes,” said the company’s secretary Stewart Mandimika.
Only a few firms, among them Delta Corporation, Cassava Smartech and Econet Wireless have published their financials using the IAS 29 reporting standard. Under the new reporting system, companies are expected to have two columns on its financial statements — one for historic cost and another one for inflation-adjusted figures.
One of the indicators of hyperinflation is when cumulative inflation over a three-year period approaches, or is in excess of 100%.
In its hyperinflation reporting guideline unveiled last November, the Institute of Chartered Accountants of Zimbabwe recommended companies to use the Zimbabwe National Statistical Agency (ZimStat)’s data as the official source of all national statistics including inflation figures and the consumer price index to restate figures.
Preparers were advised to refer to the Reserve Bank of Zimbabwe website which has been publishing implied annual inflation rate based on month on month inflation figures from ZimStat.
As of November last year, the annual inflation rate was at 480%.