When an entity's functional currency is hyperinflationary (i.e. it is the currency of a hyperinflationary economy), the entity's financial statements are 'restated' so that all items are presented in the measuring unit current at the reporting date - i.e. it adopts the current purchasing power concept.

Moreover, when an entity has foreign operations (e.g. a subsidiary, associate or joint arrangement) whose functional currency is the currency of a hyperinflationary economy, the investee's financial statements are restated before being translated and included in the investor's financial statements.

An entity is required to apply IAS 29 to its financial statements from the beginning of the reporting period in which it identifies the existence of hyperinflation.

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