Announcements Research

Hyperinflationary economy raises risks for rated Zimbabwean Financial Institutions.

Effective July 1, 2019, Zimbabwean entities are now required to apply International Accounting Standard 29 (“IAS 29”), ‘Financial Reporting in Hyperinflationary Economies’, in their financial reporting. We believe the implementation of IAS 29, could significantly increase market wide balance sheet and income statement volatility. As a result, we may see significant movements in capitalisation across the sector. The impact faced by the individual entities will depend on the balance sheet structure, i.e. monetary versus non-monetary assets and the current levels of capitalisation.