Financial Education - Accounting and financial features in hyperinflationary economies

The principal financial statements in hyperinflationary economies, whether individual or consolidated The main 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.

In those states with hyperinflationary economies, the general population prefers to keep its wealth in the form of non-monetary assets, or in a relatively stable foreign currency; moreover, the amounts of local currency obtained are immediately invested to maintain the purchasing power of the same.

On the other hand, the general population does not consider monetary amounts in terms of local currency, but views them in terms of another relatively stable foreign currency; prices can be set in this other currency.

In turn, sales and purchases on credit 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 rate of inflation as the crisis progresses tends to approach and in some extreme cases exceeds 100%.