IAS 29 — Financial Reporting in Hyperinflationary Economies


IAS 29 Financial Reporting in Hyperinflationary Economies applies where an entity's functional currency is that of a hyperinflationary economy. The standard does not prescribe when hyperinflation arises but requires the financial statements (and corresponding figures for previous periods) of an entity with a functional currency that is hyperinflationary to be restated for the changes in the general pricing power of the functional currency.

IAS 29 was issued in July 1989 and is operative for periods beginning on or after 1 January 1990.

History of IAS 29

November 1987 Exposure Draft E31 Financial Reporting in Hyperinflationary Economies
July 1989 IAS 29 Financial Reporting in Hyperinflationary Economies
1 January 1990 Effective date of IAS 29 (1989)
1994 IAS 29 was reformatted
22 May 2008 IAS 29 amended for Annual Improvements to IFRSs 2007
1 January 2009 Effective date of the May 2008 revisions to IAS 29

Related Interpretations

  • IAS 21 superseded SIC-19 Reporting Currency – Measurement and Presentation of Financial Statements under IAS 21 and IAS 29
  • IAS 21 superseded SIC-30 Reporting Currency – Translation from Measurement Currency to Presentation Currency
  • IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies

Amendments under consideration by the IASB

Summary of IAS 29

Objective of IAS 29

The objective of IAS 29 is to establish specific standards for entities reporting in the currency of a hyperinflationary economy, so that the financial information provided is meaningful.

Restatement of financial statements

The basic principle in IAS 29 is that the financial statements of an entity that reports in the currency of a hyperinflationary economy should be stated in terms of the measuring unit current at the balance sheet date. Comparative figures for prior period(s) should be restated into the same current measuring unit. [IAS 29.8]

Restatements are made by applying a general price index. Items such as monetary items that are already stated at the measuring unit at the balance sheet date are not restated. Other items are restated based on the change in the general price index between the date those items were acquired or incurred and the balance sheet date.

A gain or loss on the net monetary position is included in net income. It should be disclosed separately. [IAS 29.9]

The restated amount of a non-monetary item is reduced, in accordance with appropriate IFRSs, when it exceeds its the recoverable amount. [IAS 29.19]

The Standard does not establish an absolute rate at which hyperinflation is deemed to arise - but allows judgement as to when restatement of financial statements becomes necessary. Characteristics of the economic environment of a country which indicate the existence of hyperinflation include: [IAS 29.3]

  • the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power;
  • the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;
  • sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short;
  • interest rates, wages, and prices are linked to a price index; and
  • the cumulative inflation rate over three years approaches, or exceeds, 100%.

IAS 29 describes characteristics that may indicate that an economy is hyperinflationary. However, it concludes that it is a matter of judgement when restatement of financial statements becomes necessary.

When an economy ceases to be hyperinflationary and an entity discontinues the preparation and presentation of financial statements in accordance with IAS 29, it should treat the amounts expressed in the measuring unit current at the end of the previous reporting period as the basis for the carrying amounts in its subsequent financial statements. [IAS 29.38]


  • Gain or loss on monetary items [IAS 29.9]
  • The fact that financial statements and other prior period data have been restated for changes in the general purchasing power of the reporting currency [IAS 29.39]
  • Whether the financial statements are based on an historical cost or current cost approach [IAS 29.39]
  • Identity and level of the price index at the balance sheet date and moves during the current and previous reporting period [IAS 29.39]

Which jurisdictions are hyperinflationary?

IAS 29 defines and provides general guidance for assessing whether a particular jurisdiction's economy is hyperinflationary. But the IASB does not identify specific jurisdictions.

There are, however, two reliable sources for this kind of information:

The International Practices Task Force (IPTF) of the Centre for Audit Quality monitors the status of 'highly inflationary' countries. While it monitors the status of highly inflationary countries for the purposes of applying US GAAP, its criteria for identifying such countries are similar to those for identifying 'hyperinflationary economies' under IAS 29. From time to time, the IPTF issues reports of its discussions with SEC staff on the IPTF's recommendations of which countries should be considered highly inflationary, and which countries are on the Task Force's inflation 'watch list'. The newest available IPTF list is dated 6 November 2021. The full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force is available on the CAQ website. Please note that there is also an addendum to the list, dated 16 March 2022, that reflects significant changes to the inflation rates in Turkey since the original list was published.

In addition, the International Monetary Fund (IMF) publishes inflation forecasts. Applying the indicators laid out in IAS 29, the following economies should be considered hyperinflationary economies for the purposes of applying IAS 29 and for retranslation of foreign operations in accordance with IAS 21 The Effect of Changes in Foreign Exchange Rates in financial statements for the year ending 31 December 2021:

  • Argentina
  • Islamic Republic of Iran
  • Lebanon
  • South Sudan
  • Sudan
  • Suriname
  • Syrian Arab Republic
  • Venezuela
  • Yemen
  • Zimbabwe

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