Indian Accounting Standard (Ind AS) 29 Summary
Indian Accounting Standard (Ind AS) 29, Financial Reporting in Hyperinflationary Economies shall be applied to the financial statements, including the consolidated financial statements, of any entity whose functional currency is the currency of a hyperinflationary economy.
When the entity’s functional currency is hyperinflationary, its financial statements are restated to express all items in terms of the measuring unit current at the end of the reporting period.
The standard prescribes the following steps in restating the financial statements:
– Step 1: Restate the balance sheet at the beginning of the reporting period by applying the change in the price index during the current period to all items.
– Step 2: Restate the balance sheet at the end of the reporting period by adjusting non-monetary items to current purchasing power terms.
– Step 3: Restate the statement of profit and loss (including other comprehensive income).
– Step 4: Calculate the gain or loss on the net monetary position.
If the entity’s functional currency ceases to be hyperinflationary, then the amounts reported in the latest financial statements restated for hyperinflation are used as the basis for the carrying amounts in subsequent financial statements.
If the entity presents financial statements restated for hyperinflation, then it is generally not appropriate to present additional supplementary financial information prepared on a historical cost basis.