The International Accounting Standards Board carried out research to assess requests to:
Following feedback in the 2015 Agenda Consultation and a review of the research findings, the Board decided:
IAS 29 Financial Reporting in Hyperinflationary Economies sets out some characteristics of hyperinflation and contains requirements about the adjustments needed when an entity is subject to the effects of hyperinflation. The characteristics of hyperinflation in IAS 29 include an inflation rate threshold. This threshold suggests that hyperinflation occurs when the cumulative inflation rate over three years is approaching, or exceeds, one hundred per cent.
The requests to review IAS 29 came from stakeholders who were concerned that the financial position and performance of entities can be distorted in countries subject to medium- or long-term high inflation levels if the financial statements are not adjusted for the effects of hyperinflation (that is, where the effects of inflation are significant). The requests related mainly to the Latin America region, but were also applicable to entities in other high-inflation countries.