I am a little bit confused with the scope of application of IAS 29 because some textbooks simply state "If the criteria of hyperinflation are met, a subsidiary company needs to apply the restate-translate approach of IAS 29."
In my view this is wrong because the application of IAS 29 is closely linked to the functional currency concept of IAS 21.
Assuming the following case:
A subsidiary companies, which is based in a hyperinflationary country, functional currency is the currency of the holding company (as a result of the analysis of IAS 21). Therefore, it is NOT allowed to apply the restate-translate-method of IAS 29, but needs to apply the so called temporal method of IAS 21 to translate its currency. (In fact, this temporal method does an "implicit" inflation adjustment and is the only method allow by US GAAP in case of hyperinflation.)
Is that correct?
Many thanks in advance!
