Programme overview
Introduction:
Foreign currency and hyperinflation accounting under IAS 21 translation and IAS 29 restatement is a 1-week course for group reporting, consolidation, technical accounting and audit staff that ends with a Foreign Currency and Hyperinflation Reporting Playbook for a case group. Groups with subsidiaries in volatile-currency and high-inflation economies face misjudged functional currencies, unexplained translation reserve movements and restated figures that auditors cannot trace to a price index. Nominees already prepare or review subsidiary reporting packs, and the course is taught as case study work on worked consolidation data. CoreConcept Training Center delivers this foreign currency and hyperinflation accounting course.
Course Objectives:
- Determine the functional currency of each group entity from primary and secondary indicators and document the judgement for audit review
- Remeasure foreign currency transactions, monetary balances and non-monetary items and post the resulting exchange differences correctly
- Translate foreign operations into the group presentation currency and reconcile movements in the cumulative translation reserve, including recycling on disposal
- Restate the statements of a subsidiary in a hyperinflationary economy with a general price index and calculate the gain or loss on net monetary position
- Designate and document a hedge of a net investment in a foreign operation and account for its effective and ineffective portions
- Assemble a Foreign Currency and Hyperinflation Reporting Playbook covering policies, rate sources, indices, deferred tax and disclosures for a case group
Target Audience:
- Group reporting staff responsible for consolidating subsidiaries that report in other currencies
- Financial control staff responsible for subsidiary reporting packs in volatile-currency or high-inflation economies
- Technical accounting staff responsible for functional currency judgements and hyperinflation accounting policies
- Internal and external audit staff responsible for reviewing translation reserves, restatements and exchange difference postings
- Treasury accounting staff responsible for documenting hedges of net investments in foreign operations
Course Outline:
Day 1: Functional Currency Judgement and Group Currency Mapping
- IAS 21 Scope, Definitions and Currency Terminology Review
- Primary Indicators of Sales Prices, Costs and Competitive Forces
- Secondary Indicators From Financing and Retained Operating Receipts
- Foreign Operation Autonomy Test Against the Reporting Parent
- Group Currency Map and Functional Currency Judgement Memo
Day 2: Transaction Remeasurement and Translation of Foreign Operations
- Spot Rate Recognition and Closing Rate Retranslation of Monetary Items
- Non-Monetary Items Held at Historical Cost or Fair Value
- Closing Rate and Average Rate Translation Worksheet Build
- Goodwill and Fair Value Adjustments Treated as Foreign Assets
- Change in Functional Currency Applied Prospectively From Its Date
Day 3: IAS 29 Restatement in Hyperinflationary Economies
- IAS 29 Hyperinflation Indicators and Cumulative Inflation Assessment
- General Price Index Selection, Conversion Factors and Index Gaps
- Restating Non-Monetary Items, Equity and Comparative Figures
- Net Monetary Position Gain or Loss Calculation Schedule
- Entering and Exiting Hyperinflation With Opening Balance Adjustments
Day 4: Translation Reserve Recycling, Net Investment Hedges, Tax and Disclosure
- Cumulative Translation Reserve Roll-Forward and Non-Controlling Share
- Full and Partial Disposal Recycling of Translation Differences
- Monetary Items Forming Part of a Net Investment
- IFRS 9 Net Investment Hedge Designation and Effectiveness Documentation
- IAS 12 Deferred Tax on Restatement and Translation Differences
Day 5: Case Study Consolidation and Reporting Playbook Completion
- Case Group Restatement of a Hyperinflationary Subsidiary Trial Balance
- Case Translation into the Presentation Currency With Reserve Reconciliation
- Case Disposal of a Foreign Subsidiary With Reserve Recycling Entries
- Currency Disclosure Note and Cash Flow Exchange Effects Drafting
- Foreign Currency and Hyperinflation Reporting Playbook Completion and Peer Review
Skills You Will Gain:
- Functional Currency Assessment
- Exchange Difference Accounting
- Foreign Operation Translation
- Translation Reserve Reconciliation
- Price Index Restatement
- Net Monetary Position Analysis
- Net Investment Hedge Documentation
- Currency Disclosure Drafting
Why Attend This Course:
- Deliver a Foreign Currency and Hyperinflation Reporting Playbook for a case group to the group financial controller and the audit committee for approval
- Decide which currency each entity measures in, which price index applies and when a subsidiary enters or leaves hyperinflation accounting
- Avoid audit adjustments from unsupported translation reserve balances, missed recycling on disposal and restatements that cannot be traced to an index
- Pass on translation worksheets, restatement schedules and functional currency memo templates to subsidiary finance colleagues
Conclusion:
Back at work, the participant presents the Foreign Currency and Hyperinflation Reporting Playbook to the group financial controller, the head of reporting and the audit lead. They use it to confirm functional currencies, fix the rate and price index sources for each subsidiary, and agree how translation reserves, disposals and net investment hedges are booked at each close. After the first reporting cycle under the playbook, the unit should compare reserve movements, monetary gains or losses and audit queries with the plan and refine the rate and index procedures.
Frequently Asked Questions (FAQ):
What should participants know before a foreign currency and hyperinflation accounting course?
Participants should already prepare or review financial statements under IFRS and understand basic consolidation entries. Bringing anonymised subsidiary trial balances, exchange rate tables or price index data helps the case work reflect their own group.
How does a foreign currency and hyperinflation accounting course differ from a general consolidation course?
It spends all one week on currency and inflation effects. General consolidation courses cover control, goodwill and eliminations and treat translation as one session, while this course covers functional currency, restatement, reserve recycling, net investment hedges and the related tax and disclosure points in depth.
Why is a hyperinflationary subsidiary restated under IAS 29 before translation in foreign currency and hyperinflation accounting?
Its figures are restated first so that they are expressed in the measuring unit current at the reporting date. Only then are they translated into the presentation currency under IAS 21, so the group statements do not combine amounts of different purchasing power.
What do participants take back from the foreign currency and hyperinflation accounting course?
Participants take back a Foreign Currency and Hyperinflation Reporting Playbook for a case group, with a functional currency judgement memo, translation and restatement worksheets, a translation reserve roll-forward, net investment hedge documentation and disclosure note drafts.