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Contents

31.1 Scope.

31.2 Hyperinflationary economy.

31.2.1 Extract from FRS102: Section 31.2 – 31.14.

31.2.2 OmniPro comment.

31.2.2.1 Indicators of hyper inflation.

31.2.2.2 Examples of monetary items.

31.2.2.3 Examples of non-monetary items.

31.2.2.4 The rules where a hyper inflationary economy is identified.

31.2.2.4.1 General price index.

31.2.2.4.2 Retranslation of non-monetary assets of statement of financial position.

31.2.2.4.2.1 Example conversion for non-monetary items on the balance sheet.

31.2.2.4.3 Shareholders equity.

31.2.2.4.4 Retained earnings.

31.2.2.4.5 Restatement of income statement.

31.2.2.4.6 Cash flows.

31.2.2.4.7 Illustration of the accounting requirements in Sections 31.1 to 31.12 of FRS 102.

31.2.2.4.8 Procedures required to calculate the net monetary gain/loss as required by Section 31.13.

31.3 Disclosures.

31.3.1 Extract from FRS102: Section 31.15.

31.3.2 OmniPro Comment.

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31.1 Scope

Section 31 provides the rules to be applied where an entity’s functional currency is the currency of a hyperinflationary economy. It requires such an entity to prepare financial statements that have been adjusted for the effects of hyperinflation.

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Example

Example 1: Determining if joint control exists.

Example 2: Loans to jointly controlled operation.

Example 3: Accounting for a jointly controlled operation.

Example 4: Jointly controlled assets.

Example 5: Cost model.

Example 5A: Dividend paid out of pre-acquisition reserves.

Example 6: Equity method accounting.

Example 7: Elimination of profit where investor sells goods to joint venture.

Example 8: Sale of asset from venturer to joint venture at profit.

Example 9: Sale of asset from venturer to joint venture at loss.

Example 10: Sale of asset from joint venture to venturer at loss (Section 15.17 of FRS 102).

Example 11: loss in excess of investment.

Example 12: Deferred tax on unremitted earnings.

Example 13: Full derecognition of joint venture due to sale.

Example 14: Partial derecognition of a joint venture due to sale but joint control still retained.

Example 15: Transfer of joint venture as a result of loss of joint control due to sale.

Example 16: Loss of joint control not due to sale.

Example 17: Initial carrying amount of a joint venture following loss of control of an entity (moving from a subsidiary to a joint venture).

Example 18: Step increase in an existing joint venture.

Example 19: Step increase from investment /financial asset to associate.

Example 20: Adoption of fair value through other comprehensive income.

Example 21: Adoption of fair value through profit and loss.

Example 22: Extract from the accounting policy notes to the consolidated financial statements.

Example 23: Extract from notes to the financial statements – Joint Venture undertakings note in the consolidated financial statements and example of consolidated profit and loss account.

Example 24: Extract from accounting policy notes to the financial statements for the parent entity financial statements and for an entity that holds a joint venture interest but is not required to prepare consolidated financial statements.

Example 25: Extract from notes to the financial statements for the parent entity financial statements – Financial asset note.

Example 26: Extract from notes to the financial statements for the for an entity that holds an associate/subsidiary/joint venture interest but is not required to prepare consolidated financial statements – Financial asset note.

Example 27: Extract from the profit and loss account for an entity which is not a parent that holds an investment in an associate/joint venture or an entity that is a parent but consolidated financial statements are not required to be prepared where income is received from an associate/joint venture/subsidiary.

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