5 IAS 21 Translation to a Hyperinflationary Presentation Currency

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16 April 2026
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23 April 2026 Agenda Paper 5

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Executive Summary

Project Stage IASB Discussion Paper Redeliberation Exposure Draft Redeliberation Final Standard Post Implementation Review
IASB Research / Pipeline Discussion Paper Redeliberation Exposure Draft Redeliberation Final Standard Post Implementation Review
UKEB Research / Influencing Research / Influencing Monitoring Influencing Monitoring Endorsement Influencing

UKEB Post Implementation Review

Project Type: Endorsement Project

Project Scope: Limited

Purpose of the paper

The purpose of this paper is to:

  • Obtain Board feedback on the [Draft] Endorsement Criteria Assessment ([Draft] ECA), and related Invitation to Comment (ITC) for Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)¹ (Amendments).
  • Request the Board's approval to publish the [Draft] ECA and ITC on the UKEB website for stakeholder consultation for a 90-day comment period.

Summary of the Issue

The purpose of the [Draft] ECA is to assess whether the Amendments meet the statutory criteria for adoption set out in SI 2019/685² and to discharge the UKEB's statutory duty to consult those with an interest in the quality and availability of accounts, including users and preparers. The [Draft] ECA includes:

  • a description of the UK statutory requirements for adoption of new and amended international accounting standards;
  • a description of the Amendments; and
  • an assessment of whether the Amendments meet the statutory criteria for adoption.

An entity shall apply the Amendments for annual reporting periods beginning on or after 1 January 2027. Earlier application is permitted.

Decisions for the Board

  1. Does the Board have any comments on the [Draft] ECA (Appendix A) or the ITC (Appendix B)?
  2. Does the Board agree that, subject to any amendments or additions required by the Board, the [Draft] ECA and ITC can be published for public consultation?

Recommendation

Subject to any amendments required by the Board, the Secretariat recommends that the Board approves the [Draft] ECA and ITC for public consultation.

Appendices

Appendix A: [Draft] Endorsement Criteria Assessment of Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates) Appendix B: [Draft] ECA – Invitation to comment

April 2026

DRAFT FOR DISCUSSION

The UKEB does not accept any liability to any party for any loss, damage or costs howsoever arising, whether directly or indirectly, whether in contract, tort or otherwise from any action or decision taken (or not taken) as a result of any person relying on or otherwise using this document or arising from any omission from it.

© 2026 All Rights Reserved

Contents

Introduction

Purpose

1The purpose of this [Draft] Endorsement Criteria Assessment ([Draft] ECA) is to determine whether Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates) (Amendments) issued by the International Accounting Standards Board (IASB) in November 2025 meet the UK's statutory requirements for adoption as set out in Regulation 7 of Statutory Instrument 2019/685¹ (SI 2019/685).

2The Amendments have an effective date of 1 January 2027 with earlier application permitted, subject to the UKEB adoption for use in the UK.

3The UKEB did not influence the development of the Amendments² due to the extremely limited direct impact for UK companies. This approach was agreed in its Regulatory Strategy 2024/25³.

Background to the Amendments

4Table 1 in this [Draft] ECA provides a brief description of the Amendments.

Scope of the Adoption Assessment

5The Amendments make changes to the mandatory parts of IAS 21 and IAS 29 Financial Reporting in Hyperinflationary Economies [and consequentially to the mandatory parts of IFRS 19 Subsidiaries without Public Accountability: Disclosures]⁴. These changes to the mandatory parts of the standards form part of the UKEB's adoption assessment.

6As UK-adopted international accounting standards comprise only the mandatory⁵ sections of standards, the amendments to the Basis for Conclusions of IAS 21 [and IFRS 19] are not adopted by the Board and are not considered in this [Draft] ECA.

Structure of the Assessment

7Tables 2-4 discusses how the Amendments meet the UK statutory requirements for adoption of new or amended international accounting standards described in Appendix B.

[Draft] Adoption Decision

8[On the basis of these assessments, the UKEB [tentatively] concludes that the Amendments meet the statutory endorsement criteria. The UKEB is therefore [tentatively] of the view that it will adopt the Amendments for use in the UK.]

Description and Assessment of the Amendments

Description

| Title and issue date of final amendments | Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21) was issued on 13 November 2025. TagsThere
This document provides draft guidance that has not been approved by the UK Endorsement Board.

Appendix A: Glossary

Term Description
The Amendments Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21)
ECA Endorsement Criteria Assessment
ED Exposure Draft
EFRAG European Financial Reporting Advisory Group
IASB International Accounting Standards Board
IAS International Accounting Standard
IAS 1 Presentation of Financial Statements
IAS 8 Basis of Preparation of Financial Statements
IAS 21 The Effects of Changes in Foreign Exchange Rates
IAS 29 Financial Reporting in Hyperinflationary Economies
IFRIC The IFRS Interpretations Committee
IFRS International Financial Reporting Standard(s)
IFRS 19 Subsidiaries without Public Accountability: Disclosures
SI Statutory Instrument
UKEB UK Endorsement Board

Appendix B: UK statutory requirements for adoption

Introduction

B1. This appendix sets out the UK statutory requirements for the adoption of new or amended international accounting standards, and the endorsement criteria assessment approach.

B2. Paragraph 1 of Regulation 7 of SI 2019/685 requires that an international accounting standard only be adopted if:

  1. the standard¹³ is not contrary to either of the following principles–
    1. an undertaking's accounts must give a true and fair view of the undertaking's assets, liabilities, financial position and profit or loss;
    2. consolidated accounts must give a true and fair view of the assets, liabilities, financial position and profit or loss of the undertakings included in the accounts taken as a whole, so far as concerns members of the undertaking;
  2. the use of the standard is likely to be conducive to the long term public good in the United Kingdom; and
  3. the standard meets the criteria of understandability, relevance, reliability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management.

Approach to the endorsement criteria

B3. This [Draft] ECA assesses the criteria above, in the following order:

  1. Whether the Amendments meets the criteria of relevance, reliability, understandability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management (Regulation 7(1)(c)). We refer to these criteria collectively as the 'technical accounting criteria' (refer to Table 2).
  2. Whether the Amendments are not contrary to the principle that an entity's accounts must give a true and fair view (Regulation 7(1)(a)) (refer to Table 3).
  3. Whether use of the Amendments is likely to be conducive to the long term public good in the UK (Regulation 7(1)(b)). Regulation 7(2) of SI 2019/685 includes specific areas to consider for this assessment (refer to Table 4). They are:
    1. whether the Amendments are likely to improve the quality of financial reporting;
    2. the costs and benefits that are likely to result from the use of the Amendments; and
    3. whether the Amendments are likely to have an adverse effect on the economy of the UK, including on economic growth.

Technical accounting criteria: Relevance, Reliability, Understandability and Comparability¹⁴

B4. A description of the technical accounting criteria¹⁵ is provided below:

| Technical criteria assessment |
This document provides draft guidance that has not been approved by the UK Endorsement Board.

Appendix B: Invitation to Comment

Call for comments on Draft Endorsement Criteria Assessment of Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21)

Deadline for completion of this Invitation to Comment:

Close of business, [Thursday 30 July 2026]

Please submit to:

[email protected]

Introduction

The objective of this Invitation to Comment is to obtain input from stakeholders on the endorsement and adoption of Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21) (Amendments), published by the International Accounting Standards Board (IASB) in November 2025. The Amendments clarify the translation requirements for an entity whose presentation currency is that of a hyperinflationary economy, and either its own functional currency or that of its foreign operation is that of a non-hyperinflationary economy. The Amendments will be effective for annual periods beginning on or after 1 January 2027. Earlier application is permitted. The information collected from this Invitation to Comment is intended to help with the endorsement assessment.

UK endorsement and adoption process

The requirements for UK adoption are set out in Statutory Instrument 2019/685¹.

The powers to formally adopt international accounting standards for use in the UK were delegated to the UK Endorsement Board in May 2021².

Who should respond to this Invitation to Comment?

Stakeholders with an interest in the quality of accounts prepared in accordance with IFRS Accounting Standards.

How to respond to this Invitation to Comment

Please download this document, answer any questions on which you would like to provide views, and return it to [email protected] by close of business on [Thursday 30 July 2026].

Brief responses to individual questions are welcome, as well as comprehensive responses to all questions.

Privacy and other policies

The data collected through submitting this document will be stored and processed by the UKEB. By submitting this document, you consent to the UKEB processing your data for the purposes of influencing the development of and adopting IFRS for use in the UK. For further information, please see our Privacy Statements and Notices and other Policies (e.g. Consultation Responses Policy and Data Protection Policy)³.

The UKEB's policy is to publish on its website all responses to formal consultations issued by the UKEB unless the respondent explicitly requests otherwise. A standard confidentiality statement in an e-mail message will not be regarded as a request for non-disclosure. If you do not wish your signature to be published, please provide the UKEB with an unsigned version of your submission. The UKEB prefers to publish responses that do not include a personal signature. Other than the name of the organisation/individual responding, information contained in the “Your Details” document will not be published. The UKEB does not edit personal information (such as telephone numbers, postal or e-mail addresses) from any other response document submitted; therefore, only information that you wish to be published should be submitted in such responses.

Assessment against endorsement criteria

Our draft assessment [tentatively] concludes that:

  • the Amendments meet the criteria of relevance, reliability, understandability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c));
  • application of the Amendments is not contrary to the principle that an entity's accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)); and
  • that the Amendments are likely to be conducive to the long term public good in the UK as required by SI 2019/685 (see Regulation 7(1)(b)), having considered:
    • whether they will generally improve the quality of financial reporting;
    • the costs and benefits that are likely to result from their use; and
    • whether they are likely to have an adverse effect on the economy of the UK, including on economic growth.

Our assessment of the Amendments is set out in Section 1 of the [Draft] Endorsement Criteria Assessment ([Draft] ECA).

Amendments Page
Rationale for the Amendments [6–7]
Technical accounting criteria assessment [7–9]
True and fair view [9]
UK long term public good (including costs and benefits for preparers and users) [9–12]

Your details

  1. Name: Click or tap here to enter text.
  2. Email address: Click or tap here to enter text.
  3. Are you responding: On behalf of an organisation As an individual
  1. If responding on behalf of an organisation, Name of organisation: Click or tap here to enter text.
  2. Please select what best describes the organisation: An organisation applying IFRS Accounting Standards A user of company accounts prepared under IFRS An accounting firm / auditor A regulator Other If your response was 'Other', please describe: Click or tap here to enter text.
  3. Is your organisation a listed entity? UK listed UK AIM listed Other listed Unlisted
  4. Would you be happy for UKEB to contact you if needed to discuss your responses? Yes No

Question

Technical accounting criteria assessment

  1. Do you agree with the draft assessment of the Amendments against the technical accounting criteria? Please select one option. Please explain why or why not. Yes No Click or tap here to enter text.

True and fair view

  1. Do you agree with the draft assessment that the Amendments are not contrary to the true and fair view requirement? Please select one option. Please explain why or why not. Yes No Click or tap here to enter text.

UK long term public good

  1. Do you agree with the initial overall assessment of costs and benefits likely to arise from the Amendments? Please select one option. Please explain why or why not. Yes No Click or tap here to enter text.
  2. Do you agree with the draft assessment that the Amendments are likely to be conducive to the long term public good in the UK? Please select one option. Please explain why or why not. Yes No Click or tap here to enter text.
  3. Do you have any other comments you would like to add? Click or tap here to enter text.

Response generation

  1. Did you/your organisation use a large language model (e.g. Chat GPT, Microsoft Copilot) to create any part of your/its response (response to this Invitation to Comment or a comment letter you are submitting as part of your response)? Yes No
  2. If you answered yes to the question above, please specify which model and what prompt(s) you used for the large language model. Click or tap here to enter text.

Thank you for completing this Invitation to Comment

Please submit this document by close of business on [Thursday 30 July 2026] to: [email protected]

Footnotes

  1. A copy of the text of the Amendments has been made available to Board Members. ↩

  2. The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 No. 685 (SI 2019/685) ↩

  3. In July 2024, the IASB published an exposure draft (ED) Translation to a Hyperinflationary Presentation Currency. ↩

  4. See page 18 of the UKEB's Regulatory Strategy 2024/25. ↩

  5. [At the time of the [Draft] ECA's drafting, IFRS 19 has not been adopted for the use in the UK. The adoption decision is expected to be made after the UKEB's April 2026 meeting.] ↩

  6. The introduction to the IASB's yearly bound volumes differentiates between mandatory and non-mandatory sections of the standards. Mandatory pronouncements relate to IFRS Accounting Standards, IAS Standards, Interpretations and Mandatory Application Guidance. These are UK-adopted international accounting standards. Non-mandatory guidance includes Bases for Conclusion, Dissenting Opinions, Implementation Guidance and Illustrative Examples, together with the IFRS Practice Statements. These are not adopted by the UKEB as they are not international accounting standards, as defined in SI 2019/685. ↩

  7. The term 'standard' is used to refer to amendments to international accounting standards, in line with the definition of 'international accounting standards' in SI 2019/685, which includes 'subsequent amendments to international accounting standards'. ↩

  8. IFRIC June 2022 meeting - Consolidation of a Non-hyperinflationary Subsidiary by a Hyperinflationary Parent (IAS 21 and IAS 29). ↩

  9. The IASB introduced an exception in the final Amendments to address stakeholders' concerns associated with the costs of re-translation of comparative information for foreign operations with a non-hyperinflationary functional currency. See 'What has changed?' section. ↩

  10. Paragraph BC82 of the Amendments explains that one of the benefits for the IASB's decision to require, rather than permit, the application of the exception was to reduce diversity in practice. ↩

  11. According to the IMF World Economic Outlook published in October 2025, the inflation level in the following countries would classify their economies as hyperinflationary: Argentina, Burundi, Haiti, Islamic Republic of Iran, Lebanon, Malawi, Sierra Leone, South Sudan, Turkey, Venezuela and Zimbabwe. The projected three-year cumulative inflation of these economies exceeded 100% as of October 2025. ↩

  12. According to SI 2019/685, in deciding whether the use of a standard is likely to be conducive to the long term public good in the United Kingdom, the UKEB must have regard to "the costs and benefits that are likely to result from the use of the standard." ↩

  13. The translation methods described in the Amendments were already set out in paragraph 42 of IAS 21 and paragraph 34 of IAS 29. The Amendments would enable entities which use a hyperinflationary currency as a presentation currency to apply the same translation methods. ↩

  14. The term "standard" includes standards (International Accounting standards (IAS), International Financial Reporting standards (IFRS)), amendments to those standards and related Interpretations (Standing Interpretations Committee / International Financial Reporting Interpretations Committee interpretations) issued or adopted by the IASB. ↩

  15. Refer to Table 2 Technical accounting criteria assessment. ↩

  16. These descriptions are based on the qualitative characteristics of financial statements in the Framework for the Preparation and Presentation of Financial Statements adopted by the IASB in April 2001. These qualitative characteristics became part of the criteria for endorsement and adoption of IFRS in the EU's IAS Regulation (1606/2002), and, subsequently, in SI 2019/685. ↩