How do you account for hyperinflationary economies?
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.
What are the indicators of a hyperinflationary environment?
One of these indicators is a cumulative inflation rate over three years approaching or exceeding 100 percent. However, this is not determinative and should not be considered in isolation. The general population prefers to keep its wealth in nonmonetary assets or in a relatively stable foreign currency.
Is IAS 29 necessary?
IAS 29 is applicable for entities with the functional currency Zim$ for periods ending after 1 July 2019, and it should be applied as if the economy had always been hyper-inflationary.
How do you calculate net monetary gain or loss?
The gain or loss on net monetary position can be calculated as the difference between the historical cost amounts and the result from the restatement of non-monetary items, shareholders’ equity, items in the statement of comprehensive income and the adjustment of index-linked items to year end purchasing power.
When should I apply for IAS 29?
When does it apply? IAS 29 is applicable for entities with the functional currency of the Lebanese pound and Iranian rial for periods ending on or after 31 December 2020, and it should be applied as if the economy had always been hyper-inflationary.
Is accounting a 29 standard?
The objective of this Standard is to ensure that appropriate recognition criteria and measurement bases are applied to provisions and contingent liabilities and that sufficient information is disclosed in the notes to the financial statements to enable users to understand their nature, timing and amount.
What is the purpose of IAS 29?
The objective of IAS 29 is to establish specific standards for entities reporting in the currency of a hyperinflationary economy, so that the financial information provided is meaningful.
What are the 29 accounting standards?
STATUS OF ACCOUNTING STANDARDS ISSUED BY ICAI FOR CORPORATES
| Accounting Standard (AS) | Title of the AS | Refer Note No. |
|---|---|---|
| AS 26 | Intangible Assets | |
| AS 27 | Financial Reporting of Interests in Joint Ventures | 7 |
| AS 28 | Impairment of Assets | 8 |
| AS 29 | Provisions, Contingent Liabilities and Contingent Assets | 2, 9 |