Hyperinflation’s Business Impacts Drive Global Accounting Update

Global standard-setters advanced a revamp of their accounting rules for companies operating in hyperinflationary economies, accepting that current standards dating back to the 1980s cause confusion.

Companies in countries with rapid price increases, such as Venezuela and Zimbabwe, record business transactions on the date they occurred under current international accounting standards. But sharp changes to exchange rates amid high inflation make it hard to compare values over the course of a year.

Under the proposed accounting standard changes, deals will now be recorded at their value on the date the accounts close so that it is easier to understand and ...