An entity with more monetary assets than monetary liabilities loses purchasing power in inflation; one with more liabilities gains. Under TMS 29 this amount is shown separately in profit or loss.
Source: TMS 29
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.Monetary and non-monetary itemsMonetary items are assets and liabilities to be received or paid in a fixed or determinable amount of money (cash, receivables, payables); all others are non-monetary (inventory, property, equity).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.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.