In inflation accounting, monetary items are not restated, while non-monetary items are restated using a general price index. In foreign currency translation, monetary items are also measured at the closing rate.
Source: TMS 21, TMS 29, VUK mükerrer 298
Related terms
TAS 29 (Financial reporting in hyperinflationary economies)The standard requiring entities whose functional currency is the currency of a hyperinflationary economy to state their financial statements in terms of the purchasing power at the end of the reporting period.Inflation adjustment (tax)An adjustment made under tax legislation, when certain conditions are met, to remove the effects of price changes from the financial statements.Net monetary position gain or lossThe gain or loss of purchasing power arising from the difference between an entity's monetary assets and monetary liabilities in a hyperinflationary period.Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.
Last updated: October 31, 2026 · This definition is for general information only.