Editing Historical cost (section)

===Financial reporting in hyperinflationary economies===
IFRS requires IAS 29 Financial Reporting in Hyperinflationary Economies which prescribes [[constant purchasing power accounting|capital maintenance in units of constant purchasing power]] in currencies deemed to be hyperinflationary.<ref>IFRS - IAS29, Financial Reporting in Hyperinflationary Economies, paragraphs 8 and 9, IASC</ref> The characteristics of a hyperinflation include the population keeping its wealth in non-monetary assets or relatively stable foreign currencies, prices quoted in foreign currencies or widespread indexation of prices.  This might arise if cumulative inflation reaches or exceeds 100% over three years.
An entity operating in a hyperinflationary economy:-
* Records a gain or loss on its 'net monetary position' in its income statement.
* Records non-monetary items (for example, property, plant & equipment) in the balance sheet by applying indexation to their historical cost.