SOCPA Approves Amendment to IFRS 21

SOCPA, represented by the Accounting Standards Board, has approved the limited amendment made by the International Accounting Standards Board (IASB) to IFRS 21 "The Effects of Changes in Foreign Exchange Rates".
The objective of this amendment is to clarify when a currency is not exchangeable for another foreign currency and to provide requirements on how to determine the exchange rate in such circumstances.
Previously, SOCPA, through the Accounting Standards Board, commented on the proposed amendment mentioned above, suggesting that the term "non-exchangeability" be defined according to the description in the draft amendment. The IASB accepted this suggestion. Additionally, SOCPA proposed that the IASB provide guidelines to help estimate the exchange rate in a manner that reduces variation in estimation methods.  The IASB responded positively to this proposal by adding a paragraph in its amendment stating that an entity using another estimation method may use any observable exchange rate, including those obtained from exchange transactions conducted in markets or through exchange mechanisms that do not impose binding rights and obligations. This rate can be adjusted, as necessary, to meet the objective set out in the standard.
The amendment can be accessed by clicking here.