IAS 29 Financial Reporting Standard in High Inflation Economies: A Hypothetical Study

Abstract

The research paper addresses how inflation disrupts the unbiased and accurate preparation and presentation of financial reports. During periods of general inflation, the discrepancy between historical costs and reporting period values leads to questioning the consistent reflection of a company's current financial position or recent performance. This study first examines the requirements of the IAS 29 standard for Financial Reporting in High Inflation Economies and then applies these requirements to selected items in a case study. The document concludes that the process of inflation adjustment is complex and challenging for both businesses and auditing firms. Despite the alignment of IFRS (International Financial Reporting Standards) and TFRS (Turkish Financial Reporting Standards) requirements in Turkey, there are aspects where they do not fully coincide in terms of inflation adjustment applications.

Keywords: Inflation, Financial Reporting, IAS 29