There are two options. One is that this is an event now, requiring to be accounted for at this moment. That is the option the government is adopting. The other is to suggest that this is an event happening in maybe 18 years time which has to be accrued for between now and then in equal equivalent stages over that period.
The higher capital repayment from RPI indexed bonds should not be assigned to this year. Instead, it should be discounted over time until redemption.
This from the man who insists that discounting the future is the work of the very devil.
Even then his calculation doesn’t work. Because if we do as he says, allocate over years to redemption, then where in the accounts are the allocations for this year from past inflation? The current accounting method means those increases are all buried in past year accounts. Spud’s chosen method would mean that this year’s accounts should have some portion of past inflation in them.