New Telegraph 
The Financial Reporting Council of Nigeria (FRC), on Wednesday, said that the country was not yet a hyperinflationary economy.
Consequently, the Council, in a press statement signed by its Executive Secretary/Chief Executive Officer, Dr. Rabiu Olowo, pointed out that the International Accounting Standard (IAS) 29, which borders on Financial Reporting in Hyperinflationary Economies, should not be applied in the preparation of financial statements for the 2024 financial year.
Olowo said: “Determining hyperinflation requires significant judgment and consideration of all relevant indicators. After thorough analysis of the above indicators, the FRC concludes that Nigeria is not yet a hyperinflationary economy.
Therefore, IAS 29 should not be applied in the preparation of financial statements for the 2024 financial year. The FRC will continue to monitor economic developments and update this position when necessary.
“The FRC has extensively engaged various stakeholders such as the Professional Accounting Bodies in Nigeria, external auditors, government regulatory agencies, and significant public interest entities, where an objective evaluation of the five indicators of the economic environment of a country as stipulated in IAS 29:
Financial Reporting in Hyperinflationary Economies were undertaken especially to determine the relevance and applicability of the standard in Nigeria in light of the inflationary trend in the country.”
He explained that IAS 29 outlines the accounting requirements for entities in hyperinflationary economies, noting that it does not specify when hyperinflation arises or is deemed to arise, but rather outlines several indicators of hyperinflation that includes a preference for non-monetary assets, pricing in stable foreign currencies, credit sales adjusting for inflation, and a cumulative inflation rate approaching or exceeding 100% over a three year period.
According to him, the FRC’s analysis of these indicators for Nigeria shows that the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency and that amounts of local currency are immediately invested to maintain purchasing power.
