What changed
Lack of Exchangeability (Amendments to IAS 21) was issued by the IASB in August 2023 and applies to annual reporting periods beginning on or after 1 January 2025. It requires a consistent approach to assessing whether a currency can be exchanged into another currency, and to determining the exchange rate and disclosures when it cannot.
How it works in practice
- Assess whether you can obtain the other currency within a normal administrative delay through a market or mechanism that creates enforceable rights
- If not, estimate the spot rate that would apply to an orderly transaction between market participants
- Disclose the estimated rate, how it was estimated, and the risks and effects for the entity
Who should care
Groups with subsidiaries, customers or suppliers in markets with currency restrictions, and their auditors. Review your foreign operations and document your assessment each reporting date.
This article is general information, not accounting, tax or legal advice. Rates, thresholds and effective dates should be confirmed with the official sources (IFRS Foundation, tax authorities, regulators) or your adviser before acting.