By The Zimbabwe National Road Administration (ZINARA) has incurred a loss of ZWL$ 55.2 billion (2021:11.3 billion).
According to the Auditor-General Report, ZINARA suffered losses due to the exchange rate arising from translating the United States Dollar-dominated foreign loan balance to Zimbabwean dollars.
“The Group and the Administration translated the USD values to ZWL$ using the interbank exchange rate contrary to the requirements of International Financial Reporting Standard (IFRS) 13- fair value measurement”.
IFRS 13 indicates fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
“The ZWL$ price derived from translating the USD value at the auction exchange rate would be the price at which a ZWL$ denominated transaction would occur”, Auditor General Report, reviewed.
However, the OAG view was that “This does not give a reasonable indication of fair value as defined by International Financial Reporting Standard 13, “Fair Value Measurement”, (IFRS 13)”.
The Auditor-General recommended the Administration comply with with International Financial Reporting Standard (IFRS) 13 requirements on Fair Value Measurement. The active market was dominated by the USD while the ZWL$ was scare.
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