Exchangeability

International Accounting Standard 21 (IAS 21), dealing with the effects of changes in foreign exchange rates.

For the purposes of IAS 21 a currency is exchangeable when an entity is able to exchange significant amounts of that currency for another currency through markets or exchange mechanisms that create enforceable rights and obligations without undue delay at the measurement date and for a specified purpose.

IAS 21 was amended with effect from 1 January 2025, in relation to lack of exchangeability.

Reporting entities are now required to:

(1) Specify when a currency is exchangeable into another currency and when it is not.

(2) Specify how the reporting entity determines the exchange rate to apply when a currency is not exchangeable.

(3) Disclose additional relevant information when a currency is not exchangeable.

See also

• Cumulative exchange differences
• Currency
• Exchange
• Exchange difference
• Foreign exchange
• IAS 21
• IFRIC 22
• International Financial Reporting Standards
• Monetary
• Monetary asset
• Monetary items
• Monetary liability
• Non-monetary items
• Reporting entity

Other resources

• IAS 21 - IAS Plus summary
• IAS 21 full text
• IAS 21 amendments for lack of exchangeability - IAS Plus summary