I’ll start off. (Feel free to correct mine and other’s understanding)
In a hyperinflationary environment of a subsidiary, GAAP and IFRS differ pretty significantly in translating the sub’s financial statements for the parent:
- use temporal method
- adjust the values on the financial statements for inflation and then translate using the current exchange rate. In regards to adjusting amounts for inflation, it is in terms of a price index. For the balance sheet you adjust non-monetary assets and liabilities by multipliying by the ending price index level/beginning price index level. For the income statement for revenues and expenses because they occur throughout the year you multiply by the ending price index level/average index level.