Zimbabwe's market regulator is seeking clarity from the central bank on new rules that require companies to report results in the local currency, forcing them to adopt hyperinflationary accounting and increasing the cost of doing business.
The Securities and Exchange Commission is "engaged" with the relevant authorities on the way forward, Zimbabwe Stock Exchange chief executive officer Justin Bgoni said Monday.
Governor John Mushayavanhu earlier this month ordered companies listed on the exchange to adopt the ZiG, short for Zimbabwe Gold, for reporting purposes with "immediate effect," including for the 2024 audited financial statements.
The ZiG is used in 30% of all transactions in the economy, with the rest in US dollars.
The exchange has since 2023 allowed companies to report results in dollars, with firms including beverage manufacturer Delta Corp Ltd. switching.
The nation last used this type of accounting when the Zimbabwean dollar was still legal tender. Big Four firm KPMG said
ZSE-listed FBC Holdings Ltd. warned the move could introduce "accounting complexities, inflation translation risks, investor concerns and regulatory challenges," the Harare-based lender said in a recent client note.
It will also require companies to adjust accounting software, financial models and auditing procedures and "the application of IAS 29 — financial reporting in hyperinflationary economies — guidelines, leading to frequent revaluations," it said.
The ZiG is the nation's sixth attempt at a functioning local currency since 2009. It has shed 95% of its value since its debut, amid exchange-rate volatility that forced authorities to devalue the currency in September.
The southern African nation's difficult operating environment recently led to the exit of global accounting firms Deloitte LLP and PwC LLP.
