Lack of Exchangeability — Amendments to IAS 21


In August 2023 the International Accounting Standards Board (IASB) issued Lack of Exchangeability, which amended IAS 21 The Effects of Changes in Foreign Exchange Rates.

The amendments will become effective for annual reporting periods beginning on or after 1 January 2025. Early application is permitted.


IAS 21 sets out the exchange rate a company uses when it reports foreign currency transactions or a foreign operation’s results in a different currency. 

IAS 21 specifies the exchange rate to use in reporting foreign currency transactions when exchangeability between two currencies is temporarily lacking but does not specify what an entity is required to do when a lack of exchangeability is not temporary. 

The amendments aim to improve the usefulness of the information by:

  • Defining what it means for a currency to be “exchangeable”; ​
  • Providing guidance on determining the exchange rate when a currency is not exchangeable; and, ​
  • Specifying the disclosures to provide in those circumstances.

The UKEB actively influenced the development of these amendments. Refer to work performed as part of the ‘Influencing Project’.  

UKEB [Draft] Endorsement Criteria Assessment

The UKEB has  published its [Draft] Endorsement Criteria Assessment (DECA) Lack of Exchangeability on 5 February 2024 for public consultation. The consultation closes on 6 May 2024.

The relevant documents are available at the end of this page:

  • Project Initiation Plan
  • DECA and Invitation to Comment
  • Responses from stakeholders

UKEB outreach

The UKEB project outreach included discussions with the UKEB advisory groups, targeted outreach with some companies that are impacted and public consultation on the UKEB’s DECA.

UKEB meetings

The Amendments will be discussed in the following UKEB meetings:

  • Project Initiation Plan - 16 November 2023
  • Draft Endorsement Criteria Assessment - 30 January 2024