A measurement of the implementation of International Accounting Standard 21 (IAS 21) on financial reports on listed companies in Zimbabwe, a case of Delta Corporations.

Abstract

In the period prior to the hyperinflation condition in the early 2000s, Zimbabwe had since engaged in a multi-currency regime so as to curb the inflation crisis. Thereafter it was noted that the economy became stable whilst using a multi-currency system hence the adaptation of the use of IAS 21. The aim of this study was therefore to measure the implementation of IAS 21 on financial statements of listed companies in Zimbabwe using the case of Delta Beverages, to understand what IAS 21 means to financial statements, to evaluate the extent to which IAS 21is being applied by Delta and finally to assess any recommendations to improve the compliance levels of IAS 21. Studies have proved that many studies have been carried out on how exchange rates affect pricing, economic growth, and trade. Different assumptions were made to assess the relationship between exchange rates and trade, economic growth, imports, and exports. The research has however proved to have been done on countries that use their own currencies and this might not be sufficient in the context of our country which is dollarized thus this becomes the research gap. Also, a measure of how IAS 21 is being implemented on financial reporting was not well looked at. Therefore the study seeks to measure the degree of which IAS 21 is being applied to financial reports using a case of Delta Beverages scrutinizing how exchange rate fluctuations can impact elements of Financial Statements. The research design employed was qualitative, adopting an exploratory and descriptive approach. This design allowed for an in-depth exploration of how Delta Beverages implemented IAS 21 and the implications of exchange rate fluctuations on financial reporting. Document analysis and in-depth interviews were conducted with Delta's senior management, auditors, and stakeholders in order to obtain results. Findings have shown that Delta Corporation is implementing IAS 21 in accordance with the requirements of the standard but however, there are improvements that need to be made in order to continuously comply with the standard's requirements.