Understanding non-exchangeable currencies under TAS 21 (2025 Amendment)

This aligns Thailand’s standard with the IASB’s 2023 amendment to IAS 21, which becomes globally effective from 1 January 2025. The Thai version will apply to annual periods beginning on or after 1 January 2026, with early adoption permitted.

Why it matters

Increased geopolitical risk, capital controls, and restricted FX markets have made some currencies effectively non exchangeable. The previous TAS 21 lacked guidance for these scenarios, leading to inconsistent practices. The 2025 amendment introduces a clearer framework to support reliable financial reporting and enhance transparency.

When is a currency non exchangeable?

A currency is non exchangeable at the measurement date if:

• It cannot be legally exchanged or lacks a functioning market.
• The entity cannot obtain the required amount for conversion.
• Only insignificant amounts are available through standard channels.

Entities must assess exchangeability case by case, considering the purpose and timing of conversion, not just whether a central bank rate exists.

What to do when it happens

If a currency is non exchangeable, the entity must:

1. Estimate the spot exchange rate using observable indirect rates or valuation methods that reflect expected settlement proceeds or disposal value.
2. Apply the estimated rate to remeasure monetary items or translate foreign operations.
3. Disclose clearly the methodology used, assumptions, risks, and financial impacts.

Transition requirements

• First-time application: Use the estimated rate as of the adoption date.
• Adjust resulting gains/losses through opening retained earnings.
• No restatement of comparatives is required.

Real-world examples

TFAC’s Newsletter Issue 116 (Q4/2025) encourages entities to benchmark their judgment with global sources.

Selected currencies facing exchange restrictions:

Sources: IMF Safeguards Assessment (2025), B2B Pay (Restricted Currency List 2025)

These cases illustrate scenarios where official exchange rates may not reflect actual realisable value, requiring fair-value based estimation under TAS 21.

Key takeaways for Thai entities

• Review exposure in foreign jurisdictions:

Focus on balances in countries with dual exchange rates, capital controls, or political instability.

• Assess exchangeability at each reporting date:

Document conditions, counterparties, and purpose of conversion when judging exchangeability.

• Use supportable estimation techniques:

When no observable rate exists, apply fair and realistic models reflecting economic substance.

• Enhance financial disclosures:

Clearly explain the restrictions, estimation approach, and impact on financial results.

References:

• TFAC Newsletter:

October-December 2025 Technical update (in Thai). Retrieved from the Thailand Federation of Accounting Professions.

• IMF Safeguards Assessment 2025. Retrieved from International Monetary Fund.

B2B Pay Restricted Currency List 2025. Retrieved from B2B Pay.