Inflation Adjustment

The distorting effect that inflation causes in the company’s financial information, it has caused the emission of national and international accounting standards in order to incorporate these effects on the financial statements of the companies, for proper decision-making in project evaluation, investment opportunities and dividend payments that do not decapitalize the company.

In this sense, the BA VEN-NIF 2 issued by the Federation of Accountants of Venezuela established the application of the inflation adjustment according to IAS 29 and section 31 of the IFRS for SMEs, when inflation in a year economic exceed one (1) digit and once management assess the impact on the financial statements.

On the other hand, the Law on Income Tax establishes the incorporation of the gain or loss resulting from inflation as part of the net taxable enrichment for the year. DATA SISTEMAS, CA, company associated with BAKER TILLY VENEZUELA, developed the software called INFLATION ADJUSTMENT SYSTEMS AND FINANCIAL AND FISCAL CONSOLIDATION (SAIC). This software allows quickly and accurately calculate the tax inflation adjustments and financial restatement, plus financial consolidation or merger of the companies belonging to the same group.
In case you are interested, you could learn more about the SAIC in the annex presentation or require a presentation of it, we can do it without compromise.

Similarly we are in a position to prepare the restatement of financial statements of the company, if so required the service.