Listed firms ordered to report in new currency

EARNINGS reports from listed companies may take longer than usual to hit the market after firms were ordered to present their numbers in the new currency.

In his monetary policy statement last week, central bank chief John Mangudya converted bond notes and all electronic money into a currency — RTGS dollar — and abandoned the fixed exchange rate 1:1 parity policy on the surrogate bond note currency and opted for a managed interbank floating system.

Chief executives of leading public companies told businessdigest this week that the public auditors’ body had ordered all Zimbabwe Stock Exchange-listed companies to use the RTGS dollar as a benchmark currency when presenting the December year-end numbers.

The move could see companies reporting their financials later than expected as accountants try to come up with the acceptable valuations between the two currencies.

“We are still trying to figure out which rates of exchange to use on RTGS dollar given the fact that they are two effective rates of exchange (the black market and the official interbank rate,” a top executive told businessdigest this week.

The parallel market rate was around US$1:3,8 as of Wednesday while the official rate was around US$1:2,5 on the same day.

Zimbabwe adopted the use of US dollars in 2009 to end hyperinflation fueled by unrestrained printing of money by the then central bank chief Gideon Gono that had destroyed the value of the local currency.

Until recently, companies were reporting their earnings in US dollars. Debate had been raging in recent times after central bank chief John Mangudya introduced bond notes and pursued a fixed exchange rate policy of 1:1 with the US unit at a time the parallel market premium had risen above 400%.

ZSE acting chief executive Martin Matanda yesterday said the Public Accountants and Auditors Board (PAAB) has been doing a lot of work and has made recommendations on what should be done on financial statements in relation to the currency issue.

Under the Public Accountants and Auditors Act, PAAB is responsible for defining and enforcing ethical practice and discipline among all professional accountants. — Staff Writer.