Entities operating in hyperinflationary economies, and those preparing IFRS consolidated financial statements that include a foreign entity operating in a hyperinflationary economy, must take full account of the effects of inflation using a ‘current purchasing power’ approach under IAS 29. This requires an understanding of the economic concepts underlying the standard and a complex series of procedures and reconciliations to ensure accurate results.
Financial reporting in hyperinflationary economies: Understanding IAS 29 provides an overview of the concepts of the standard, descriptions of the necessary procedures and a detailed illustrative example. It has been updated as of December 2005 to reflect the changes that have arisen as a result of the release of IFRIC 7 and other changes to IFRS.
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