Chapter 8: Disclosures

The disclosures required by IAS 29 are intended to provide information necessary to understand the basis of accounting and the resulting amounts.

Entities should consider the following in relation to presentation and disclosure of restated financial statements or financial statements that consolidate subsidiaries with a functional currency of a hyper-inflationary economy:

• The gain or loss on net monetary position should be included in profit or loss and separately disclosed.
• Management should describe, in the accounting policy note, the methodology used in applying IAS 29. The following information should be disclosed:
• the fact that the financial statements and the comparatives have been restated and, as a result, that they are stated in terms of the measuring unit current at the balance sheet date;
• whether the financial statements are based on an historical cost approach or a current cost approach; and
• the identity and level of the price index at the balance sheet date and the movement in the index during the current and previous reporting periods.
• Entities may also consider disclosing the three-year cumulative inflation at the balance sheet date.
• Any significant judgements made in applying IAS 29 should be disclosed in accordance with the requirements in paragraph 122 of IAS 1, ‘Presentation of financial statements’.

Entities with subsidiaries that have a functional currency that is the currency of a hyper-inflationary economy should consider explaining in their accounting policies the application of paragraph 43 of IAS 21. Such entities should also consider explaining that comparative amounts presented previously in a stable currency are not restated, together with the policy adopted for recognising the differences between the closing equity of the previous year and the opening equity of the current year

Disclosures when IAS 29 is first applied The initial application of IAS 29 will lead to the recognition of a catch-up adjustment, because IAS 29 is applied as if the economy had always been hyper-inflationary. Entities should consider disclosing the methodology applied in determining the catch-up adjustment and, if applicable, the accounting policy elected. Entities should also consider the requirements in IAS 34 in the interim financial statements in which IAS 29 is first applied. IAS 34 requires an entity to explain “the events that are significant to an understanding of the changes in the entity’s financial position and performance since the end of the last annual reporting period”. Entities should consider disclosing in the accounting policy note the methodology used to apply IAS 29, and its impact on assets, liabilities, equity, net income, and cash flows.