On 15 November 2024, the amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates titled Lack of Exchangeability were endorsed by the European Commission for use in the European Union. The EU effective date is the same as the IASB’s effective date (annual periods beginning on or after 1 January 2025).
Amendments contain guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not.
The amendments state that a currency is exchangeable when an entity is able to exchange that currency for another currency through market or exchange mechanisms that create enforceable rights and obligations without undue delay at the measurement date and for a specified purpose.
If a currency is not exchangeable, the entity is required to disclose information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity ‘s financial performance, financial position and cash flows.
You can find more information about Amendments to IAS 21 in our article IASB publishes amendments to IAS 21.
Source: www.iasplus.com
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