Link with IAS 29

Learning objectives

• Identify the link with IAS 29 (hyperinflationary economies).L3

Normative references

• IAS 21 §42Functional currency of a hyperinflationary economy and a different presentation currency: (a) all amounts (assets, liabilities, equity items, income and expenses, including comparatives) are translated at the closing rate at the date of the most recent statement of financial position; (b) however, when amounts are translated into the currency of a non-hyperinflationary economy, comparative amounts are those presented as current year amounts in the relevant prior year financial statements, not adjusted for subsequent changes in the price level or in exchange rates. Introductory sentence amended by the November 2025 amendment (para. 60O, future requirement).
• IAS 21 §43An entity whose functional currency is the currency of a hyperinflationary economy restates its financial statements in accordance with IAS 29 before applying the translation method in para. 42, except for comparative amounts translated into the currency of a non-hyperinflationary economy (para. 42(b)); when the economy ceases to be hyperinflationary, the amounts restated to the price level at the date the entity ceased restating are used as the historical costs for translation into the presentation currency.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• For an operation whose functional currency is that of a hyperinflationary economy, amounts are restated under IAS 29 before being translated at the most recent closing rate.L3