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Lack of Exchangeability (Possible Amendments to IAS 21) [ED]

Comment period ends on September 1, 2021

Next steps:

The IASB plans to review the Exposure Draft Feedback in H2/2021

The AcSB issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. The AcSB will not be submitting a response letter to the IASB Exposure Draft. However, this decision will be reviewed throughout the comment period and reconsidered based on stakeholder feedback. As a result, stakeholders are encouraged to reply to the AcSB prior to July 15, 2021 to support their ongoing discussions.

Last updated:

May 2021

Overview

At its meeting in November 2019, the IASB discussed a recommendation from the IFRS Interpretations Committee (IFRIC) to undertake narrow-scope standard-setting on the spot exchange rate an entity uses when exchangeability between two currencies is lacking.

The Board also discussed the Committee’s recommendations regarding how to amend IAS 21, The Effects of Changes in Foreign Exchange Rates, in this regard. In particular, the Board discussed the IFRIC’s analysis and recommendations on how to:

  • define exchangeability and, thus, a lack of exchangeability; and
  • determine the spot exchange rate when exchangeability is lacking.

The Board agreed with the IFRIC’s recommendations and tentatively decided to undertake narrow-scope standard-setting on this matter.

On April 20, 2021, the IASB pub­lished an Ex­po­sure DraftLack of Ex­change­abil­ity (Pro­posed amend­ments to IAS 21) that con­tains pro­posed guid­ance to spec­ify when a cur­rency is ex­change­able and how to de­ter­mine the ex­change rate when it is not. Com­ments are re­quested by Sep­tem­ber 1, 2021. For further details refer to the related news item.

 

Other developments

May 2021

On May 18, 2021, the AcSB issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. The AcSB will not be submitting a response letter to the IASB Exposure Draft. However, this decision will be reviewed throughout the comment period and reconsidered based on stakeholder feedback. As a result, stakeholders are encouraged to reply to the AcSB prior to July 15, 2021 to support their ongoing discussions.

April 2021

On April 30, 2021, IASB staff updated the Work Plan to indicate that the Board plans to review the Exposure Draft Feedback in H2/2021.  

On April 20, 2021, the IASB published an exposure draft Lack of Exchangeability (Proposed amendments to IAS 21) that contains proposed guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not. Comments are requested by September 1, 2021.

February 2021

On February 19, 2021, IASB staff updated the Work Plan to indicate that the Board plans to issue an Exposure Draft in April 2021.

January 2021

On January 29, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to issue an Exposure Draft in March 2021.

October 2020

On October 30, 2020, IASB staff updated the Work Plan to indicate that the Board plans to issue an Exposure Draft in Q1/2021.

January 2020

On January 31, 2020, the IASB staff updated the Work Plan to indicate that the IASB expects to issue an Exposure Draft in respect of this project (no date specified).

November 2019

At its meeting on November 20, 2019, the IASB added this pro­ject to its work plan.

 

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