The proposed amendment to IAS 21 (a) defines exchangeability and thus a lack of exchangeability; and (b) specifies how an entity determines the spot exchange rate when a currency lacks exchangeability. 

The AcSB’s due process included:

• ensuring that Canadian entities’ financial reporting needs were considered by the IASB; and
• issuing the AcSB’s own exposure draft on the IASB proposal.

The IASB’s proposals were deemed appropriate for application in Canada and accordingly the amendments have been incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRS Standards for publicly accountable enterprises.

The amendments are now in Part I of the CPA Canada Handbook – Accounting, effective for annual reporting periods beginning on or after January 1, 2025. The amendments require entities to apply a consistent approach in assessing whether a currency can be exchanged into another currency and, when it cannot, in determining the exchange rate to use and the disclosures to provide.

Access the effective dates here.