IASB publishes Amendments to IAS 21 (Lack of Exchangeability)

The IASB today issued Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates.

The Amendments stem from a request to the IFRS IC about the determination of the exchange rate when there is a long-term lack of exchangeability, as IAS 21 did not include explicit requirements on the exchange rate an entity uses when the spot exchange rate is not observable. The IASB published an Exposure Draft (ED/2021/4) on this matter in April 2021 (we reported).

The Amendments add requirements to IAS 21 on:

• when a currency is exchangeable into another currency and, consequently, when it is not;
• how an entity determines the exchange rate to apply when a currency is not exchangeable; and
• the information an entity provides when a currency is not exchangeable.

The Amendments to IAS 21 shall be applied for annual reporting periods beginning on or after 1 January 2025. Earlier application is permitted.

These Amendments are available from the IASB subject to charges only (IASB press release).