This standard applies to the primary financial statements, whether individual or consolidated, of any company that prepares and presents them in the currency of a hyperinflationary economy. The state of hyperinflation is indicated by the characteristics of the country's economic environment, which include, but are not limited to, the following:
The general population prefers to hold its wealth in the form of non-monetary assets, or else in a relatively stable foreign currency; moreover, the amounts of local currency obtained are immediately invested to maintain the purchasing power of the local currency.
The general population does not consider monetary amounts in terms of local currency, but sees them in terms of another relatively stable foreign currency; prices can be set in this other currency.
Credit sales and purchases take place at prices that compensate for the expected loss of purchasing power during the postponement, even when the period is short.
Not least, interest rates, wages and prices are linked to the evolution of a price index; and the cumulative inflation rate over three years approaches or exceeds the known maximum limit.