RDR Concessions: Translation to a Hyperinflationary Presentation Currency
The XRB has recently issued an amending standard, Translation to a Hyperinflationary Presentation Currency (Amendments to NZ IAS 21), which introduced new requirements for entities translating operations with functional currencies in non‑hyperinflationary economies to a hyperinflationary presentation currency.
The XRB is not proposing any disclosure concessions for Tier 2 for‑profit entities in relation to the new disclosure requirements. Further detail is provided in the section below.
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Disclosure requirements introduced to NZ IAS 21 |
Proposal |
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Paragraph 53A When an entity applies paragraph 41A to translate its results and financial position or the results and financial position of a foreign operation, the entity shall disclose the fact that all amounts (that is assets, liabilities, equity items, income and expenses and, if not applying paragraph 47A, comparatives) in its financial statements, or the results and financial position of its foreign operations, have been translated at the closing rate at the date of the most recent statement of financial position. |
No RDR concession has been proposed for this disclosure requirement on the basis this information would be fundamental to understanding the accounting policies for entities that use the closing rate at the date of the most recent statement of financial position (irrespective of whether it is a Tier 1 or Tier 2 entity).
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Paragraph 53B When an entity’s functional currency is that of a hyperinflationary economy, and that entity applies paragraphs 41A and 47A to translate the results and financial position of its foreign operations, the entity shall disclose summarised financial information about its foreign operations that enables users of financial statements to assess the effect of these foreign operations on the entity’s results and financial position. The entity shall label the comparative summarised financial information about its foreign operations to identify that the entity prepared the information by applying the general price index it applies to corresponding figures for the previous reporting period in accordance with paragraph 34 of NZ IAS 29.
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No RDR concession has been proposed for this disclosure requirement on the basis this information would be fundamental to understanding the nature and extent of the foreign operation and the respective translation to the group financial statements – given they include a combination of hyperinflationary and non-hyperinflationary transactions (irrespective of whether it is a Tier 1 or Tier 2 entity). |
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Paragraph 54A When an entity applies paragraph 41B, the entity shall disclose that its presentation currency has ceased to be the currency of a hyperinflationary economy. |
No RDR concession has been proposed for this disclosure requirement on the basis this information would be fundamental to understanding the accounting policies for entities that use the closing rate at the date of the most recent statement of financial position (irrespective of whether it is a Tier 1 or Tier 2 entity).
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About the RDR framework
The purpose of the RDR framework is to simplify the financial reporting for Tier 2 entities by removing or modifying some of the disclosure requirements in the accounting standards, while maintaining the same recognition and measurement requirements as Tier 1 entities.
The objective is to balance the benefits with the costs of preparing financial statements for Tier 2 for-profit entities. It achieves this by only requiring disclosures when they are of particular interest or value to users of those financial statements.
How to provide feedback
Feedback is sought from stakeholders who may be affected by the proposals.
You can provide feedback by completing the form below or sending your submission to accounting@xrb.govt.nz
This consultation will close on 19 August 2026.
All submissions will be published on the XRB website unless confidentiality is requested. If you object to the release of any information in your submission, please identify the specific parts and the reasons under the Official Information Act 1982. We reserve the right not to publish defamatory submissions. Submissions are subject to the Official Information Act 1982 and the Privacy Act 2020. The XRB will handle personal information in accordance with these Acts.