BC58 An entity’s estimation of a spot exchange rate when a currency is not exchangeable into another currency could materially affect its financial statements. That estimation would also require the entity to make judgements and assumptions. In developing the requirements, the IASB was informed that users of financial statements are interested not only in the effect on an entity’s financial statements of estimating the spot exchange rate, but also in understanding an entity’s exposure to a currency that is not exchangeable into another currency. Users said information about the nature and financial effects of a currency not being exchangeable into another currency, the spot exchange rate used, the estimation process and the risks to which the entity is exposed would help their analyses. Accordingly, the applicable disclosure requirements in the Standard are designed to provide users with such information.
BC59 The IASB observed that some of the requirements in paragraphs A19-A20
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