• IAS 29 Financial Reporting in Hyperinflationary Economies
  • IFRS 1 First-time Adoption of IFRS


  • IFRIC D5 Issued 11 March 2004
  • Comment Deadline 14 May 2004
  • The draft Interpretation was available publicly on the IASB's Website during the comment period.
  • Click for Press Release (PDF 22k).
  • IFRIC Interpretation 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies issued 24 November 2005. Click for Press Release (PDF 65k).

Deloitte Letter of Comment on IFRIC D5

Important: IFRIC D5 resulted in the final IFRIC Interpretation 7, issued in November 2005. The information on this page reflects the IFRIC's discussions during the development of the final interpretation, including tentative decisions that were changed along the way. We have retained this page for historical purposes only.

Summary of IFRIC D5

IAS 29 Financial Reporting in Hyperinflationary Economies requires 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. Draft Interpretation D5 contains guidance on how an entity would restate its financial statements in the first year it identifies the existence of hyperinflation in the economy of its functional currency. Comment deadline is 14 May 2004.

The restatement approach on which IAS 29 is based distinguishes between monetary and non-monetary items. However, in practice there has been uncertainty about how an entity goes about restating its financial statements for the first time, especially deferred tax balances and comparatives.

The main proposal in the draft Interpretation is that, in the first year an entity identifies the existence of hyperinflation, the entity must start applying IAS 29 as if it had always applied the Standard. Therefore, an entity recreates an opening balance sheet at the beginning of the earliest annual accounting period presented in the restated financial statements for the first year it applies IAS 29.

The draft Interpretation also explains that if detailed records of the acquisition dates of items of property, plant, and equipment are not available or estimable, an entity uses an independent professional assessment of the fair values of the items as the basis for restating them. Equally, if a general price index is not available, it may be necessary to use an estimate based, for example, on the movements in the exchange rate between the functional currency and a relatively stable foreign currency when an entity restates its financial statements.

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