International Financial Reporting Standards_guide.pdf

428 Chapter 39 Financial Reporting in Hyperinflationary Economies (IAS 29)
39.3 KEY CONCEPTS
39.3.1 A general price index that reflects changes in general purchasing power should be
used.
39.3.2 Restatement starts from the beginning of the period in which hyperinflation is
identified.
39.3.3 When hyperinflation ceases, restatement is discontinued.
39.4 ACCOUNTING TREATMENT
39.4.1 The financial statements of an entity that reports in the currency of a hyperinflationary
economy should be restated in the measuring unit current at the reporting date; that is,
the entity should restate the amounts in the financial statements from the currency units in
which they occurred into the currency units on the reporting date.
39.4.2 The restated financial statements replace the financial statements and do not serve
as a supplement to the financial statements. Separate presentation of the nonadjusted financial
statements is not permitted.
Restatement of Historical Cost Financial Statements
39.4.3 Amounts not already expressed in terms of the measuring unit current at the end of
the reporting period should be restated by applying a general price index. The rules applicable
to the restatement of items included in the Statement of Financial Position are as
follows:
■ Monetary items are not restated as they are already expressed in the current monetary
unit.
■ Index-linked assets and liabilities are restated in accordance with the agreement that
specifies the index to be used.
■ Nonmonetary items are restated in terms of the current measuring unit by applying
the changes in the index or currency unit to the carrying values since the date of
acquisition (or the date on which a revaluation was performed) or fair values on dates
of valuation.
■ Nonmonetary assets are not restated if they are carried at net realizable value, fair
value, or recoverable amount at reporting date.
■ For assets under an arrangement where payment is deferred without incurring an
explicit interest charge, the restatement should be done from the payment date and not
the acquisition date.
■ At the beginning of the first period in which the principles of IAS 29 are applied,
components of owners’ equity, except accumulated profits and any revaluation surplus,
are restated from the dates the components were contributed.
■ At the end of the first period and subsequently, all components of owners’ equity are
restated from the date of contribution.
■ The movements in owners’ equity are included in equity.
39.4.4 All items in the Statement of Comprehensive Income are restated by applying the
change in the general price index from the dates when the income or expenses were initially
recorded.