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As at December 31, 2022, there were eleven countries around the world whose economies were considered hyperinflationary. Entities whose functional currency is the currency of one of these countries and that have December 31, 2022, reporting requirements have to reflect the requirements of IAS 29, Financial Reporting in Hyperinflationary Economies, in their IFRS financial statements.
Recent IFRIC decisions relating to hyperinflation
The IFRS Interpretations Committee (IFRIC) recently considered a number of accounting issues in relation to hyperinflation. They included:
- translating a hyperinflationary foreign operation and presenting exchange differences;
- accounting for cumulative exchange differences before a foreign operation becomes hyperinflationary;
- presenting comparative amounts when a foreign operation first becomes hyperinflationary.
We encourage careful consideration of not only the IAS 29 issues noted above but also an issue they considered earlier this year, which was how to consolidate a non-hyperinflationary subsidiary by a hyperinflationary parent.
Linked documents.
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Download the document adviser-alert_hyperinflationary-countries_update-december-31-2022_jan-2023_p
IFRS Adviser Alert | Hyperinflationary countries – Update for periods ending December 31, 2022