Hyperinflation and Its Impact on the Financial Results

Oday Tamimi, Ildikó Orbán

Abstract


This paper aims to show the impact of hyperinflation on financial results, a phenomenon that is experienced in developed or developing countries. The concepts of hy- perinflation and financial results were highlighted in addition to the effects of hyperinflation on the financial results based on secondary sources and the financial results of multinational corporations (MNCs) operating in Venezuela, which is currently the first among the econo- mies affected by hyperinflation; a significant impact of this type of inflation on these affected corporations was observed. The most important result for this paper is that hyperinflation leads to the issuance of financial results in a misleading manner, and thus it causes difficulty in making proper decisions. Therefore, economies affected by hyperinflation should pay at- tention to solving this problem by focusing on how to manage the causes of hyperinflation.


Keywords


hyperinflation, financial results, IASB, IAS 29

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DOI: https://doi.org/10.13165/IE-20-14-2-01

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"Intellectual Economics" ISSN online 1822-8038 / ISSN print 1822-8011