ASCG comments on the ED/2024/4 Translation to a Hyperinflationary Presentation Currency

On 6 November 2024, the ASCG submitted its comment letter on the IASB ED/2024/4 Translation to a Hyperinflationary Presentation Currency (Proposed amendments to IAS 21) (view previous news item) to the IASB. At the same time, the ASCG submitted its comment letter on EFRAG’s Draft Comment Letter on this ED to EFRAG.

In its comments, the Financial Reporting Technical Committee (FR TC) welcomes the proposed translation method in IAS 21, which adjusts the translation of an entity’s financial statements (or the results and financial position of a foreign operation) from a non-hyperinflationary functional currency to a hyperinflationary presentation currency. The FR TC also agrees with the proposed transitional provisions.

On the other hand, the additional disclosure requirements in IAS 21 and IFRS 19 are viewed critically. The FR TC expressed concern that these additional disclosures may be redundant or overload the financial statements. The disclosure requirement in paragraph 53A(b) of IAS 21 to provide summarised financial information about a foreign operation is generally supported. However, the FR TC sees a need for clarification of the specific disclosures required in this context.