AASB Standard | AASB 2025-4 |
Amendments to Australian Accounting Standards – Translation to a Hyperinflationary Presentation Currency
AASB Standard | AASB 2025-4 |
Amendments to Australian Accounting Standards – Translation to a Hyperinflationary Presentation Currency
This Standard is available on the AASB Digital Standards Portal (standards.aasb.gov.au), which can also be accessed from aasb.gov.au.
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ISSN 1036-4803
Preface
Accounting Standard
AASB 2025-4 Amendments to Australian Accounting Standards – TRANSLATION TO a hyperinflationary presentation currency
from page
Application 5
Amendments to AASB 121 5
Amendments to AASB 129 7
COMMENCEMENT OF THE LEGISLATIVE INSTRUMENT 8
aVailable on the AASB website
IASB Basis for Conclusions – Amendments
Australian Accounting Standard AASB 2025-4 Amendments to Australian Accounting Standards – Translation to a Hyperinflationary Presentation Currency is set out on pages 5–8. All the paragraphs have equal authority.
This Standard makes amendments to AASB 121 The Effects of Changes in Foreign Exchange Rates (August 2015) and AASB 129 Financial Reporting in Hyperinflationary Economies (August 2015).
These amendments arise from the issuance of International Financial Reporting Standard Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21) by the International Accounting Standards Board in November 2025.
This Standard amends AASB 121 and AASB 129 to clarify the translation procedures for an entity whose presentation currency is that of a hyperinflationary economy, in the following circumstances:
(a) the entity’s functional currency is that of a non-hyperinflationary economy and it is translating its results and financial position into the currency of a hyperinflationary economy; and
(b) the entity is translating into the currency of a hyperinflationary economy the results and financial position of a foreign operation whose functional currency is that of a non-hyperinflationary economy.
The amendments include the translation procedures for comparatives in the entity’s financial statements and also address the effect of the entity’s presentation currency ceasing to be the currency of a hyperinflationary economy.
This Standard applies to annual periods beginning on or after 1 January 2027. Earlier application is permitted.
The Australian Accounting Standards Board makes Accounting Standard AASB 2025-4 Amendments to Australian Accounting Standards – Translation to a Hyperinflationary Presentation Currency under section 334 of the Corporations Act 2001.
Keith Kendall
Dated 10 December 2025 Chair – AASB
This Standard amends AASB 121 The Effects of Changes in Foreign Exchange Rates (August 2015) and AASB 129 Financial Reporting in Hyperinflationary Economies (August 2015) as a consequence of the issuance of International Financial Reporting Standard Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21) by the International Accounting Standards Board in November 2025.
The amendments set out in this Standard apply to entities and financial statements in accordance with the application of AASB 121 and AASB 129 set out in AASB 1057 Application of Australian Accounting Standards.
This Standard applies to annual reporting periods beginning on or after 1 January 2027. Earlier application is permitted.
This Standard uses underlining, striking out and other typographical material to identify the amendments to AASB 121 and AASB 129 in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.
Paragraphs 39, 42, 44, 47 and 55 are amended. Paragraphs 41A–41B, 47A, 53A–53B, 54A and 60O–60P are added. New text is underlined and deleted text is struck through. |
Use of a presentation currency other than the functional currency
Translation to the presentation currency
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39 When an entity’s functional currency and presentation currency differ and are the currencies of non-hyperinflationary economies, the The results and financial position of the an entity whose functional currency is not the currency of a hyperinflationary economy shall be translated into the a different presentation currency using the following procedures:
(a) assets and liabilities for each statement of financial position presented (ie including comparatives) shall be translated at the closing rate at the date of that statement of financial position;
(b) income and expenses for each statement presenting profit or loss and other comprehensive income (ie including comparatives) shall be translated at exchange rates at the dates of the transactions; and
(c) all resulting exchange differences shall be recognised in other comprehensive income.
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41A When an entity’s functional currency is the currency of a non-hyperinflationary economy but its presentation currency is the currency of a hyperinflationary economy, the results and financial position of the entity shall be translated into the presentation currency by translating all amounts (ie assets, liabilities, equity items, income and expenses, including comparatives) at the closing rate at the date of the most recent statement of financial position.
41B When the economy whose currency is the entity’s presentation currency ceases to be hyperinflationary and the entity’s functional currency continues to be the currency of a non-hyperinflationary economy, the entity shall no longer apply paragraph 41A and instead apply paragraph 39. The entity shall do so prospectively from the beginning of the reporting period in which the economy ceases to be hyperinflationary—ie the entity shall not retranslate amounts that arose before the beginning of the reporting period.
42 When an entity’s functional currency and presentation currency differ and the entity’s functional currency is the currency of a hyperinflationary economy, the The results and financial position of the an entity whose functional currency is the currency of a hyperinflationary economy shall be translated into the a different presentation currency using the following procedures:
(a) all amounts (ie assets, liabilities, equity items, income and expenses, including comparatives) shall be translated at the closing rate at the date of the most recent statement of financial position, except that
(b) when amounts are translated into the currency of a non‑hyperinflationary economy, comparative amounts shall be those that were presented as current year amounts in the relevant prior year financial statements (ie not adjusted for subsequent changes in the price level or subsequent changes in exchange rates).
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Translation of a foreign operation
44 Paragraphs 45–47A47, in addition to paragraphs 38–43, apply when the results and financial position of a foreign operation are translated into a presentation currency so that the foreign operation can be included in the financial statements of the reporting entity by consolidation or the equity method.
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47 Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation shall be treated as assets and liabilities of the foreign operation. Thus they shall be expressed in the functional currency of the foreign operation and shall be translated at the closing rate in accordance with paragraphs 39, 41A and 42.
47A When an entity’s functional currency and presentation currency are the currency of a hyperinflationary economy (or are the currencies of different hyperinflationary economies) and the entity translates the results and financial position of a foreign operation whose functional currency is that of a non-hyperinflationary economy, the entity shall not apply paragraph 41A to the comparative amounts of that foreign operation. Instead, the entity shall restate the comparative amounts of that foreign operation included in the entity’s previously issued financial statements by applying the general price index it applies to corresponding figures for the previous reporting period in accordance with paragraph 34 of AASB 129.
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53A When an entity applies paragraph 41A to translate its results and financial position or the results and financial position of a foreign operation, the entity shall disclose the fact that all amounts (ie assets, liabilities, equity items, income and expenses and, if not applying paragraph 47A, comparatives) in its financial statements, or the results and financial position of its foreign operations, have been translated at the closing rate at the date of the most recent statement of financial position.
53B When an entity’s functional currency is that of a hyperinflationary economy, and that entity applies paragraphs 41A and 47A to translate the results and financial position of its foreign operations, the entity shall disclose summarised financial information about its foreign operations that enables users of financial statements to assess the effect of these foreign operations on the entity’s results and financial position. The entity shall label the comparative summarised financial information about its foreign operations to identify that the entity prepared the information by applying the general price index it applies to corresponding figures for the previous reporting period in accordance with paragraph 34 of AASB 129.
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54A When an entity applies paragraph 41B, the entity shall disclose the fact that its presentation currency has ceased to be the currency of a hyperinflationary economy.
55 When an entity presents its financial statements in a currency that is different from its functional currency, it shall describe the financial statements as complying with Australian Accounting Standards only if they comply with all the requirements of Australian Accounting Standards including the translation method set out in paragraphs 39, 41A, and 42 and 47A.
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60O AASB 2025-4 Amendments to Australian Accounting Standards – Translation to a Hyperinflationary Presentation Currency, issued in December 2025, added paragraphs 41A–41B, 47A, 53A–53B, 54A and 60P and amended paragraphs 39, 42, 44, 47 and 55. An entity shall apply those amendments for annual reporting periods beginning on or after 1 January 2027. Earlier application of the amendments is permitted. If an entity applies the amendments for an earlier period, it shall disclose that fact.
60P In applying AASB 2025-4 Amendments to Australian Accounting Standards – Translation to a Hyperinflationary Presentation Currency:
(a) an entity, whose functional currency and presentation currency are the currency of a hyperinflationary economy (or are the currencies of different hyperinflationary economies) and that translates the results and financial position of foreign operations whose functional currency is that of a non-hyperinflationary economy, shall:
(i) apply the amendments from the beginning of the annual reporting period in which it first applies the amendments;
(ii) restate the comparative amounts of its foreign operations included in the entity’s previously issued financial statements by applying the general price index it applies to corresponding figures in accordance with paragraph 34 of AASB 129; and
(iii) disclose comparative summarised financial information about its foreign operations and label such information to identify that the entity prepared the information by applying (ii).
(b) except as specified in (a), an entity shall apply the amendments retrospectively in accordance with AASB 108; and
(c) an entity is not required to disclose the information that would otherwise be required by paragraph 28(f) of AASB 108.
Paragraphs 8 and 34 are amended. New text is underlined and deleted text is struck through. |
The restatement of financial statements
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8 The financial statements of an entity whose functional currency is the currency of a hyperinflationary economy, whether they are based on a historical cost approach or a current cost approach, shall be stated in terms of the measuring unit current at the end of the reporting period. The corresponding figures for the previous period … and any information in respect of earlier periods shall also be stated in terms of the measuring unit current at the end of the reporting period. For the purpose of presenting comparative amounts in a different presentation currency, paragraphs 41A, 42(b), and 43 and 47A of AASB 121 The Effects of Changes in Foreign Exchange Rates apply.
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34 Corresponding figures for the previous reporting period, whether they were based on a historical cost approach or a current cost approach, are restated by applying a general price index so that the comparative financial statements are presented in terms of the measuring unit current at the end of the reporting period. Information that is disclosed in respect of earlier periods is also expressed in terms of the measuring unit current at the end of the reporting period. For the purpose of presenting comparative amounts in a different presentation currency, paragraphs 41A, 42(b), and 43 and 47A of AASB 121 apply.
For legal purposes, this legislative instrument commences on 31 December 2026.