MCA Notifies Key Amendments to Ind AS 21 on Foreign Currency Exchangeability

The Ministry of Corporate Affairs has notified key amendments to Ind AS 21 concerning foreign currency exchangeability, effective from April 1, 2025. The revised standard provides clearer guidance on determining functional currency for entities operating in hyperinflationary economies and introduces specific criteria for assessing exchangeability of currencies. It mandates additional disclosures about currency conversion restrictions and their financial statement impacts. The amendments aim to address practical challenges faced by multinational corporations in currency translation, particularly for subsidiaries in countries with capital controls. Companies must now perform more rigorous assessments of whether foreign currencies are truly convertible for financial reporting purposes.