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

Next steps:

The IASB plans to issue an Exposure Draft in Q1/2021 

Last updated:

October 2020

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.

 

Other developments

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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