Pas 29

• PAS 29 prescribes the restatement procedures for the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy.
• Inflation is normally ignored in accounting due to the stable monetary unit assumption. However, when inflation is very high ('hyper'), it can no longer be ignored.
• The financial statements of an entity that reports in the currency of a hyperinflationary economy, whether they are based on historical cost or current cost, shall be stated in terms of the measuring unit current at the end of the reporting period. 
• PAS 29 prohibits the presentation of the required information as supplement to unrestated financial statements.

  PAS 29 discourages the separate presentation of the financial statements before restatement.
• Statement of financial position

  1. Monetary items - not restated
  2. Non-monetary items measured at cost - restated
  3. Non-monetary items measured at fair value or NRV at the end of the reporting period - not restated. However, if the fair value or NRV was determined at a date other than the end of the reporting period, that fair value or NRV is nonetheless restated, from the date it was determined.
• Statement of comprehensive income & Statement of cash flows

  All items are restated
• The gain or loss on the net monetary position resulting from the restatements is recognized in profit or loss.
• Formula for restatement

  = Historical cost x Current price index/Historical price index
• If any of the entities belonging to a group entity reports in a hyperinflationary economy, the financial statements of that entity needs to be restated first before they are consolidated in the group's financial statements.