IASB proposes update for missing exchange rates
The International Accounting Standards Board (IASB) has published a consultation on proposed amendments to IAS 21, ‘The Effects of Changes in Foreign Exchange Rates,’ the standard setting out the exchange rate a company should use to report foreign currency transactions or a foreign operation’s results in a different currency.
As it is now, IAS 21 does not establish what to do when there is no available exchange rate the company can use, such as when a currency cannot be converted into another currency. The amendments, on ‘Lack of Exchangeability,’ will help companies identify this situation and the accounting to apply. By specifying the disclosure approach to take, they should improve the consistency and therefore usefulness of reported information. The deadline for comments is 1 September 2021.