IASB proposes amendments to IAS 21

On 25 July 2024, the IASB published an exposure draft on amendments to IAS 21. The proposal affects companies that translate financial information from their functional currency into a hyperinflationary presentation currency.

Financial information from hyperinflationary economies is useful if it appropriately reflects the current purchasing power of the currency. In the opinion of the IASB, the current provisions of IAS 21 do not always result in that outcome and have led to diversity in accounting practice.

The amendments are supposed to bring the following benefits:

• More consistent and useful information in financial statements prepared in hyperinflationary currencies,
• Standardisation of accounting practices in connection with translation into a hyperinflationary currency,
• Improved comparability of financial information between companies and jurisdictions, and
• Simpler and more cost-effective regulations for the companies concerned.

The exposure draft can be commented on until 11 November 2024 and is available for download on the IASB's website.