IASB Issues Amendments to IAS 21 for Hyperinflationary Currency Translation

Posted 27 November 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The International Accounting Standards Board (IASB) has released amendments to the International Accounting Standard IAS 21 (The Effects of Changes in Foreign Exchange Rates) to standardise the translation of financial information into hyperinflationary currencies.

In terms of the International Financial Reporting Standards (IFRS) framework, these narrow-scope amendments focus specifically on Translation to a Hyperinflationary Presentation Currency. The changes address diversity in practice that arose when companies translated financial results from a non-hyperinflationary functional currency into a presentation currency that is hyperinflationary.

The amendments are designed to improve the usefulness of financial information by providing a clearer basis for reporting while remaining cost-effective for preparers. Key aspects of the update include:

  • Clarification of the translation method when a presentation currency is hyperinflationary;
  • Reduction of diversity in how entities apply IAS 21 in these specific economic contexts; and
  • Provision of a more consistent reporting framework for stakeholders analysing entities with exposure to hyperinflationary economies.

The amendments to IAS 21 are effective for annual reporting periods beginning on or after 1 January 2027. Entities are permitted to apply these changes earlier, provided that fact is disclosed.

Click here to download the IAS 21 Amendments: Translation to a Hyperinflationary Presentation Currency.

What this means for you, your business, or your clients

  • For yourself: Update your technical CPD records and advisory templates to reflect the clarified translation methodology for hyperinflationary reporting to ensure accurate professional advice.
  • For your business: Audit and accounting firms must update their internal IFRS compliance checklists and consolidation workpapers to incorporate the 1 January 2027 requirements for affected group structures.
  • For your clients: Entities presenting financial results in a hyperinflationary currency must assess their current translation methods against the new IAS 21 requirements to identify potential reporting adjustments and disclosure changes.

Originally published at https://accountingacademy.co.za/news/read/iasb-amendments-to-ias-21-for-translating-financial-information-into-hyperinflationary-currencies

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