Currently, IAS 21 does not provide an adequate basis for translating financial information, when the presentation currency of the entity is of a hyperinflationary economy and the functional currency is of a non-hyperinflationary economy. To reduce diversity in practice and improve usefulness of information for investors, the IASB has proposed narrow scope amendments to IAS 21 with the aim of addressing accounting issues that affect companies that translate financial information from a non-hyperinflationary currency to a hyperinflationary currency.
IASB has proposed that when an entity translates amounts from a functional currency that is the currency of a non-hyperinflationary economy to a presentation currency that is the currency of a hyperinflationary economy, the entity should translate those amounts, including comparative amounts, using the closing rate at the date of the most recent statement of financial position.
The exposure draft is open for comments till 22 November 2024.
To access the text of the exposure draft, please click click here
Stakeholders raised concerns that information about climate-related uncertainties in financial statements was insufficient or appeared to be inconsistent with information provided outside the financial statements.
In order to address the above, the IASB proposed eight illustrative examples that focus on areas such as materiality judgements, disclosures about assumptions and estimation uncertainties, and disaggregation of information. The examples aim to:
- improve transparency of information in financial statements; and
- strengthen the connection between financial statements and other parts of a company’s reporting, such as sustainability disclosures.
The proposal is open for comments till 28 November 2024.
To access the text of the IASB announcement, please click click here