Scope
This Standard shall be applied to the financial statements, including the consolidated financial statements, of any entity whose functional currency is the currency of a hyperinflationary economy.
Definitions
Hyperinflation is indicated by factors such as prices, interest and wages linked to a price index, and cumulative inflation over three years of around 100 per cent or more.
In a hyperinflationary environment, financial statements, including comparative information, must be expressed in units of the functional currency current as at the end of the reporting period. Restatement to current units of currency is made using the change in a general price index. The gain or loss on the net monetary position must be included in profit or loss for the period and must be separately disclosed.
An entity must disclose the fact that the financial statements have been restated, the price index used for restatement, and whether the financial statements are prepared on the basis of historical costs or current costs.
An entity must measure its results and financial position in its functional currency. However, after restatement, the financial statements may be presented in any currency by translating the results and financial position in accordance with IAS 21.
Disclosures
The following disclosures shall be made:
- the fact that the financial statements and the corresponding figures for previous periods have been restated for the changes in the general purchasing power of the functional currency and, as a result, are stated in terms of the measuring unit current at the end of the reporting period;
- whether the financial statements are based on a historical cost approach or a current cost approach; and
- the identity and level of the price index at the end of the reporting period and the movement in the index during the current and the previous reporting period.