International Accounting
Standards Board
30, Cannon Street, London EC4M 6XH, United Kingdom
15 November 2010
On the Exposure Draft
ED/2010/12 Severe Hyperinflation
Proposed amendment to IFRS 1
Dear Sir/Madam,
The Bank of Russia has considered the Exposure Draft ED/2010/12 Severe
Hyperinflation – Proposed amendment to IFRS 1 and informs the following.
Question 1
We support the proposal of IASB to give the reporting entity the right to measure assets
and liabilities at fair value and use that fair value as deemed cost of those assets and liabilities in
the opening statement of financial position prepared in accordance with IFRSs (paragraph В30 of
the exposure draft) when an entity’s date of transition to IFRSs is on, or after, the date when it’s
functional currency was subject to severe hyperinflation.
We think in situation when existing IFRSs doesn’t contain guidance on how an entity
should return to presentation in the financial statements in accordance to IFRS after the period
when it’s functional currency was subject to severe hyperinflation, it is appropriate to include in
IFRSs the relevant recommendations about that the entity may, but not obliged, to use fair value
of assets and liabilities as their deemed cost in the opening statement of financial position.
Question 2
We propose to consider the possibility to prepare recommendations about presentation
in the financial statements the results of effect of hyperinflation on the equity capital of the
reporting entity.
We are of the opinion when preparing the financial statements in circumstances of
hyperinflation, the result of effect of hyperinflation on the equity capital of the reporting entity
calculated with the use of general price index (paragraphs 24 and 25 of IAS 29 Financial
reporting in hyperinflationary economies) should be presented not as a part of retained earnings
but as a separate component of the capital, namely as single line in the statement of changes in
equity.
Yours sincerely,
L. Gudenko
Chief Accountant of the Bank of Russia –
Director of Accounting and Reporting Department
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