Part Amendments to AASB 121 - Accounting Standard AASB 2025-4 Amendments to Australian Accounting Standards – Translation to a Hyperinflationary Presentation Currency - Amendments to AASB 121 | Zoe
Accounting Standard AASB 2025-4 Amendments to Australian Accounting Standards – Translation to a Hyperinflationary Presentation Currency
Amendments to AASB 121Amendments to AASB 121
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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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Disclosure
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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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Effective date and transition
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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.