SOCPA Shares its Comments on Proposed Amendments to the IAS 21
The International Accounting Standards Board (IASB) published a draft amendment to IAS 21, "The Effects of Changes in Foreign Exchange Rates", to provide appropriate accounting treatment for determining exchange rates when an entity is faced with a situation where a foreign currency cannot be exchanged.
SOCPA, represented by its Accounting Standards Committee, expressed its views on the draft in a letter addressed to IASB. Specifically, SOCPA has proposed reconsidering the definition given to exchangeability, to include the factors referred to in the proposed paragraphs within the draft amendment. Also, SOCPA requested from IASB to clarify with regards to the draft whether the absence of one of the characteristics of exchangeability renders the currency non-exchangeable for the purposes of the standard.
In addition to that, SOCPA explained that the reason why companies differ when exchangeability is lacking for a particular currency, is due to the absence of agreed upon estimation techniques to estimate the exchange rate. SOCPA therefore requested IASB to set some guidance concerning appropriate estimation techniques to estimate the exchange rate when exchangeability is lacking.
You can read Discussion Paper, click here.
For SOCPA's comments, click here.