IFRS 1 Amendment: Severe Hyperinflation
- Published in the Official Journal
- Rasmus Sommer
The IASB proposed to add an exemption to IFRS 1 to allow an entity, which has been subject to hyperinflation, to measure assets and liabilities at fair value and use that fair value as the deemed cost of those assets and liabilities in the opening IFRS statement of financial position (when the date of transition is on, or after, the date when the functional currency of the reporting entity ceases to be subject to severe hyperinflation).
On 3 December 2010, EFRAG issued its final comment letter supporting the amendment, but with some concerns on the scope and the application of the proposals. Most of these concerns were addressed by the IASB when the final amendment was issued in December 2010.
EFRAG initiated the endorsement process.
In December 2011, EFRAG issued an Invitation to Comment on its draft endorsement advice and a draft Effect Study Report in respect of the Amendments. Based on the comments received, EFRAG issued in January 2012 to the European Commission a positive endorsement advice and the Effect Study Report.