Ind AS 29 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Ind AS 29 is the standard for entities whose functional currency belongs to an economy where prices rise so fast that unrestated figures stop being useful. It requires the statements to be expressed in the measuring unit current at the end of the reporting period. Most Indian companies never meet it, but a group with a foreign subsidiary in such an economy does.
The standard applies to the financial statements, including consolidated statements, of any entity whose functional currency is the currency of a hyperinflationary economy (paragraph 1). It sets no fixed rate: hyperinflation is a matter of judgement, indicated by features such as a cumulative inflation rate over three years approaching or exceeding 100 per cent (paragraph 3). Non-monetary items and equity are restated with a general price index; monetary items are not (paragraphs 11 to 15). The gain or loss on the net monetary position goes to profit or loss and is disclosed separately (paragraph 9).
Ind AS as on 1 April 2025 (ICAI Compendium of Ind AS 2025-26, the standards notified under the Companies (Indian Accounting Standards) Rules, 2015). Amendments notified after 1 April 2025 are not reflected in this article; check mca.gov.in before applying it to a later period.
Who applies it and from when
Ind AS 29 was notified by G.S.R. 111(E) dated 16 February 2015, as printed in the text. Its scope is the entity whose functional currency is the currency of a hyperinflationary economy (paragraph 1). An entity applies it from the beginning of the reporting period in which it identifies hyperinflation, and it is preferable that all entities reporting in the currency of that economy apply it from the same date (paragraph 4).
An Indian group meets the standard through a foreign subsidiary, joint venture or associate whose functional currency is hyperinflationary. Ind AS 21, paragraphs 42 and 43, say the entity first restates its statements under Ind AS 29 and then translates them into the presentation currency at the closing rate. Our guide to foreign currency under Ind AS 21 covers how functional currency is chosen. Where such a subsidiary exists, our virtual CFO services team can support the restatement and group translation.
Is the economy hyperinflationary?
Paragraph 3 gives no absolute rate. It lists characteristics, which include (a) the population preferring non-monetary assets or a stable foreign currency, (b) monetary amounts being thought of in a stable foreign currency, (c) credit prices that compensate for expected loss of purchasing power, (d) interest rates, wages and prices linked to a price index, and (e) cumulative inflation over three years approaching or exceeding 100 per cent. The conclusion is a judgement on all of them together. It is not a mechanical test of the last one.
Requirements, head by head
| Paragraph | Requirement | What it means in practice |
|---|---|---|
| Ind AS 29, 8 | Statements, including comparatives, stated in the measuring unit current at the end of the period | Every figure is converted to year-end purchasing power |
| 9, 27, 28 | Gain or loss on net monetary position in profit or loss, separately disclosed | The balancing item |
| 11 to 14 | Restate non-monetary items by a general price index; monetary items and price-linked items are not restated, or are adjusted by the agreement | Cash and borrowings stay; land, stock and equipment move |
| 15 to 18 | Restate from acquisition date (or revaluation date) | Records of dates are essential |
| 19 | Reduce to recoverable amount or net realisable value where restated amount is higher | Ind AS 36 and Ind AS 2 still apply |
| 21 | Do not both restate financed capital expenditure and capitalise the inflation part of borrowing costs | No double count |
| 24, 25 | Opening equity, other than retained earnings and revaluation surplus, restated from contribution dates | Retained earnings are the derived figure |
| 26, 30, 33 | All income, expenses and cash flows restated | A uniform measuring unit |
| 32 | Differences between restated carrying amounts and tax bases follow Ind AS 12 | Deferred tax arises |
| 34 | Corresponding figures restated | Comparatives move too |
| 35, 36 | Subsidiaries in hyperinflationary currencies restated by their own index before consolidation, then translated at closing rates | Others follow Ind AS 21 |
| 37 | A general price index reflecting general purchasing power | Same index for all entities in that economy, where possible |
| 38 | On ceasing, the last restated amounts become the carrying basis | No reversal |
| 39, 40 | Disclosures: restatement fact; historical or current cost basis; identity and level of the index and its movement; duration of the hyperinflationary situation | The last item is an Ind AS addition |
Current cost statements and the first year
Entities using current cost do not restate items already at current cost, and restate the rest by the same rules (paragraphs 29 to 31). In the year hyperinflation is first identified, Appendix A says to apply the standard as if the economy had always been hyperinflationary, so the opening balance sheet of the earliest period presented is restated from the dates assets were acquired. Opening deferred tax is remeasured after restating the carrying amounts and then restated for the change in the measuring unit (Appendix A, paragraph 4).
The first year is the heaviest, because every acquisition date must be found and indexed.
Worked example
The entity and all figures in this example are invented for illustration. The country, its currency (the zarn, ZRN) and the price index are assumed, for arithmetic only. Amounts are in ZRN million.
Kaveri Overseas Limited has an overseas subsidiary whose functional currency is the zarn. The subsidiary's balance sheet at 1 April 2025 (index 200) and its year to 31 March 2026 (closing index 300; the year's income and expenses fall evenly, average index 250) are as follows. The land was bought when the index was 150 and the share capital was contributed when it was 100.
| Historical cost | 1 April 2025 | 31 March 2026 |
|---|---|---|
| Land | 600 | 600 |
| Cash (monetary) | 300 | 500 |
| Borrowings (monetary) | (200) | (200) |
| Net assets | 700 | 900 |
| Share capital | 500 | 500 |
| Retained earnings | 200 | 400 |
During the year the subsidiary had revenue of 900 and cash expenses of 700, so profit before restatement is 200 and cash rises by 200.
Step 1: restate the closing balance sheet (paragraphs 11 to 15). Factor = closing index ÷ index at the date.
| Item | Historical | Factor | Restated |
|---|---|---|---|
| Land (index 150) | 600 | 300 ÷ 150 = 2.0 | 1,200 |
| Cash | 500 | not restated | 500 |
| Borrowings | (200) | not restated | (200) |
| Net assets | 1,500 | ||
| Share capital (index 100) | 500 | 300 ÷ 100 = 3.0 | 1,500 |
| Retained earnings (derived, paragraph 24) | 0 |
Check: 1,500 net assets less share capital 1,500 leaves derived retained earnings of nil.
Step 2: restate the opening balance sheet to year-end units. Land 600 x 2.0 = 1,200; cash 300 x 300 ÷ 200 = 450; borrowings (200) x 1.5 = (300); net assets 1,350. Share capital is 1,500, so derived opening retained earnings are 1,350 - 1,500 = (150), a deficit. The restated profit for the year is therefore 0 - (-150) = 150.
Step 3: restate profit or loss (paragraph 26) and find the net monetary position loss (paragraph 27). The average index for the year is 250, so the factor for income and expenses is 300 ÷ 250 = 1.2.
| Statement of profit and loss | Historical | Restated |
|---|---|---|
| Revenue | 900 | 1,080 |
| Expenses | (700) | (840) |
| Operating profit | 200 | 240 |
| Loss on net monetary position (balancing figure) | (90) | |
| Profit for the year | 200 | 150 |
Check: the balancing figure is 150 - 240 = (90). Paragraph 27 allows an estimate by applying the index change to the net monetary position: the opening net monetary asset of 100 (cash 300 less borrowings 200) loses 100 x (300 ÷ 200 - 1) = 50, and the net inflow of 200 during the year, received at an average index of 250, loses 200 x (300 ÷ 250 - 1) = 40. The total of 50 + 40 = 90 agrees with the balancing figure. The entity held more money than it owed, so it lost purchasing power.
Step 4: translate (Ind AS 21, paragraph 42). After restatement the statements are translated at the closing rate, assumed at ₹0.05 per zarn, for the consolidated statements of the Indian parent.
| Item | ZRN million | ₹ lakh (x 0.05 x 10) |
|---|---|---|
| Land | 1,200 | 600.00 |
| Cash | 500 | 250.00 |
| Borrowings | (200) | (100.00) |
| Net assets | 1,500 | 750.00 |
| Profit for the year | 150 | 75.00 |
Check: 600.00 + 250.00 - 100.00 = 750.00. The net assets of 1,500 zarn million at ₹0.05 are ₹75 million, which is ₹750 lakh. Comparative amounts translated into the currency of a non-hyperinflationary economy are those presented in the prior year's statements (Ind AS 21, paragraph 42(b)).
Disclosures
Paragraph 39 requires four disclosures: that the statements and corresponding figures are restated for general purchasing power and stated in year-end units; whether historical cost or current cost is the basis; the identity and level of the index at the end of the period and its movement in the current and previous periods; and the duration of the hyperinflationary situation.
Difference from IFRS
For the wider comparison, see our Ind AS and IFRS differences guide. The standard's own comparison appendix lists the difference from IAS 29 and IFRIC 7: Ind AS 29 requires an additional disclosure of the duration of the hyperinflationary situation. Paragraph number 23 is retained though it appears as deleted in IAS 29, and terminology differs (balance sheet and statement of profit and loss).
Need help with Ind AS 29?
Hyperinflation work depends on index series, acquisition dates for non-monetary items and a clean translation into rupees. Our virtual CFO services team can set up the restatement workbook and the group disclosure note with your finance team.
Key takeaways
- The standard applies to any entity whose functional currency is that of a hyperinflationary economy, including a foreign subsidiary in a group.
- There is no fixed rate: judgement across the paragraph 3 characteristics, with 100 per cent over three years as one indicator.
- Non-monetary items and equity are restated; monetary items are not.
- The net monetary position gain or loss is a separate profit or loss item.
- Restate first, then translate at the closing rate.
- Disclose the index, the basis and the duration.
Read next
- Foreign currency under Ind AS 21: functional currency, monetary items and translating a foreign operation
- Conceptual Framework for Financial Reporting under Ind AS
- Ind AS v IFRS: carve-outs, carve-ins and other differences standard by standard
Disclaimer: Based on the Indian Accounting Standards as on 1 April 2025 (ICAI Compendium of Ind AS 2025-26, the standards notified under the Companies (Indian Accounting Standards) Rules, 2015) and, where named, the ITFG clarification bulletins of ICAI, as consulted on 4 October 2026. The worked example uses invented figures. Amendments notified after 1 April 2025 should be checked on mca.gov.in. This article is general information, not legal advice; check the official text before acting.