Harare – NMBZ Holdings Limited has said that it shall delay the publication of its Q3 2019 interim financial results, gaining more time to take into effect the complexities of the application of hyperinflationary accounting.
In terms of the Zimbabwe Stock Exchange (ZSE) listing requirements, results for the period under review should be published on or before the 15th of November 2019.
The ZSE has granted the Group an extension to publish the results on or before the 15 of December 2019.
“The Public Accountants and Auditors Board of Zimbabwe (“PAAB”) issued a pronouncement on 11 October 2019 that all Zimbabwean entities with reporting periods ending on or after 1 July 2019 are required to apply hyperinflationary accounting,” the Group said in a statement.
In terms of the requirements of the International Accounting Standard 29 (“IAS 29”), “Financial Reporting in Hyperinflationary Economies”, all entities reporting in the same hyperinflationary operating environment are encouraged to apply similar indices to produce the inflation adjusted financial statements.”
IAS 29 applies to any entity whose functional currency is the currency of a hyperinflationary economy.
Hyperinflation is indicated by factors such as prices, interest and wages linked to a price index, and cumulative inflation over three years of around 100 per cent or more.
In a hyperinflationary environment, financial statements, including comparative information, must be expressed in units of the functional currency current as at the end of the reporting period. Restatement to current units of currency is made using the change in a general price index. The gain or loss on the net monetary position must be included in profit or loss for the period and must be separately disclosed.
Beverages maker, Delta Corporation also recently announced that it will be delaying publication of its results for the same reason.
Meanwhile, the PAAB is expected to issue further guidance by no later than the 15th of November 2019 on the application of IAS 29 to ensure that uniformity is achieved by all entities operating in the Zimbabwean environment.
In its previous half year financial results ended 30 June 2019, NMBZ recorded a 533% increase in profit before tax of ZWL$74.5 million compared to ZWL$11.8 million recorded in the comparative period last year.
Total comprehensive income for that period came in at ZWL$61.4 million, which was an increase of 576% from a total comprehensive income of ZWL9.1 million achieved in the prior year.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, firstname.lastname@example.org and email@example.com.