Generation of financial position statements by Syrian companies in the context of hyperinflation. Part 1

Abstract

Subject. This article examines inflation, its impact on the statements of financial position of companies of the Syrian Arab Republic, and the adjustment of their data taking into account consumer price indices in the context of hyperinflation, based on the provisions of IAS 29 – Financial Reporting in Hyperinflationary Economies. Objectives. The article aims to study the effects of inflation on Syrian companies, identify and solve the problems of compiling the Statement of Financial Position. Methods. For the study, I used observation, comparison, generalization, and interpretation. Scientific works and publications of scientists dealing with inflation and its impact on financial reporting, the Central Bureau of Statistics (Syria) (CBS) data on consumer price indices, provisions of IAS 29 on the formation of reporting by organizations whose functional currency is the currency of the hyperinflationary economy, are the methodological basis of the study. Results. The article describes the impact of inflation on the financial position of Syrian companies, and discusses the method of adjusting the financial statements of Syrian companies in the conditions of hyperinflation. It also compares the reporting data with indicators calculated on the basis of historical information. Conclusions and Relevance. The article confirms the hypothesis about the positive impact of the adoption of IAS 29 on the Statement of Financial Position preparation. If companies operate in an economy prone to hyperinflation, the applicability of IAS 29 is justified, moreover, this Standard will help improve the reliability of information presentation for making management decisions.