15. July 2021

ASCG comments on the IASB ED/2021/4 Lack of Exchangeability

Today, the ASCG has submitted its comment letters to the IASB on the ED/2021/4 Lack of Exchangeability (Amendments to IAS 21) and to EFRAG on its Draft Comment Letter on this ED.

We welcome the ED and the IASB’s efforts to create provisions that would help companies determine whether a currency can be exchanged into another currency and what accounting to apply if the currency cannot be exchanged. Furthermore, we support the Board’s decision to develop a framework to support the estimation process instead of proposing detailed requirements or specifying a particular estimation technique.

“However, we suggest including some illustrative examples on how an entity would reasonably estimate the exchange rate when there is no observable exchange rate, or when the observable exchange rate does not meet the conditions of an estimated spot rate in paragraph 19A. Further, we believe it would be helpful if the Board illustrated how an entity would reflect inflation in estimating the spot exchange rate in an example”, commented Prof Dr Sven Morich, Vice-President of the ASCG, on the discussions in the IFRS Technical Committee.