In a new exposure draft, the IASB proposed narrow-scope amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates, to address accounting issues that affect companies that translate financial information from a nonhyperinflationary currency to a hyperinflationary currency.
“In a hyperinflationary economy, financial information is useful only if it reflects a measure of current purchasing power of the currency,” a news release said. “Applying IAS 21 today does not always result in that outcome and in some cases has led to diversity in accounting practice.”
According to the release, benefits of these amendments include:
- More consistent and useful information in financial statements presented in hyperinflationary currencies;
- Removal of diversity in accounting practices related to translation into a hyperinflationary currency;
- Improved comparability of financial statements among companies and jurisdictions; and
- Simpler and low-cost accounting requirements for affected companies.
The exposure draft is open for comment until 22 November, the release said. The board is seeking feedback on the proposed amendments from interested or affected stakeholders.
Comments can be submitted online or by email to commentletters@ifrs.org.
FRC publishes annual report
The UK Financial Reporting Council (FRC) published its annual report and accounts for 2023–2024, detailing the regulator’s key achievements and highlights in improving corporate reporting and audit quality.
According to a news release, some key highlights include:
- Completing a major consultation on the UK Corporate Governance Code, engaging with more than 5,000 stakeholders to ensure proportionate and targeted regulation.
- Launching a review of the UK Stewardship Code to drive the right stewardship behaviours, enabling UK corporates to access capital and deliver growth.
- Enhancing audit quality through targeted initiatives, including developing approaches to support smaller audit firms in taking on larger and more complex clients.
“Our proactive approach and increased stakeholder engagement are enabling us to make significant advances in shaping proportionate corporate reporting and governance,” FRC CEO Richard Moriarty said in the release. “As we look ahead, we remain committed to our public interest purpose, continuous improvement, and enhancing stakeholder trust and confidence in our ability to deliver on that purpose.”
IASB concludes technical work on three projects
The IASB concluded its technical decision-making on three projects, a news release said. Those include the second comprehensive review of the IFRS for SMEs accounting standard project; the rate-regulated activities project; and the post-implementation review (PIR) of IFRS 15, Revenue From Contracts With Customers.
For the board’s PIR, a project summary and feedback statement of the review is expected to be completed in the third quarter of 2024, the release said. For IFRS for SMEs, the IASB plans to issue the third edition of the standard in the first half of 2025.
“The IASB has completed its redeliberations on the rate-regulated activities project, and the focus will now move to drafting a new accounting standard,” the release said.
The board expects to issue the standard in the second half of 2025 with a recommended effective date of 1 January 2029, providing companies with sufficient time for implementation.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.
