Response 1 - E.Beale

Deadline for completion of this Invitation to Comment:

Close of business, Monday 27 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 Monday 27 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 Tables 1-4 of the [Draft] Endorsement Criteria Assessment ([Draft] ECA).

Question

Technical accounting criteria assessment

1Do you agree with the draft assessment of the Amendments against the technical accounting criteria? Please select one option. Please explain why or why not.

UK law allows a choice of presentation currency. Use of a hyperinflationary presentation currency will always produce information that is less relevant to users than using a non-hyperinflationary presentation currency. As a matter of principle the UKEB should only be allowing the use of a hyperinflationary presentation currency when there is no practical alternative.

If an entity has a non-hyperinflationary functional currency, then presenting information in a hyperinflationary currency cannot be said to be faithfully representing the underlying economics of the individual entity. And it cannot be more relevant than presenting information in the non-hyperinflationary functional currency.

However, in consolidated financial reports where the majority of the group has a hyperinflationary functional currency it may be more relevant to prepare the consolidated financial reports using the hyperinflationary currency as the presentation currency and to translate the financial reports of a small subsidiary from the non-hyperinflationary functional currency into the hyperinflationary presentation currency as part of the consolidation process.

The specific (minor) amendments themselves should improve the existing standards and increase understandability and comparability. However, the requirement for these amendments does highlight the consequences of attempting to write rules for every possible situation, rather than relying on principle based financial reporting standards.

Because the incidence of use of hyperinflationary presentation currencies by UK entities should be negligible to non-existent the UKEB should adopt the changes to maintain alignment with IFRS despite the above comments.

True and fair view

2Do 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.

The changes are not sufficiently material to impact on a true and fair view assessment.

UK long term public good

3Do 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.

Because the incidence of use of hyperinflationary presentation currencies by UK entities should be negligible to non-existent the UKEB should adopt the changes to maintain alignment with IFRS despite the above comments.

4Do 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.

Because the incidence of use of hyperinflationary presentation currencies by UK entities should be negligible to non-existent the UKEB should adopt the changes to maintain alignment with IFRS despite the above comments.

5Do you have any other comments you would like to add?

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Impact on UK entities

6Are you a preparer of financial statements that could be affected by the Amendments?

7Are you aware of any UK entities that could be affected by the Amendments?

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Response generation

8Did 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)?

9If you answered yes to the question above, please specify which model and what prompt(s) you used for the large language model.

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Thank you for completing this Invitation to Comment

Please submit this document by close of business on Monday 27 July 2026 to: [email protected]