English

Telefónica: Venezuela and Argentina, hyperinflationary economies

Telefónica, a Spanish multinational telecommunications company, detailed the trend of inflation growth in Venezuela and Argentina, which it defined as hyperinflationary economies.

On the one hand, Telefónica considers Venezuela to be a hyperinflationary country since 2009.

In the preparation of the consolidated financial statements, given the deterioration in the economic and political crisis in Venezuela and in the absence of official rates representative of the country’s situation, Telefónica maintains as a policy the estimation of an exchange rate, called the synthetic exchange rate, that is adjusted to the evolution of inflation and that contributes to adequately reflect the economic-financial and patrimonial situation of its Venezuelan subsidiaries.

For the calculation of the synthetic exchange rate, the published inflation data is taken into consideration. On an annual basis, the rates used have been 686.4%, 2,959.8% and 9,585.5% for 2021, 2020 and 2019, respectively.

The exchange rate used to convert items in bolivars, once adjusted for inflation, in the consolidated financial statements is the synthetic closing exchange rate as of December 31 of each fiscal year, which amounted to 16.47 digital bolivars per dollar, 2 million 094.405 sovereign bolivars per dollar and 68.448 sovereign bolivars per dollar as of December 31, 2021, 2020 and 2019, respectively.

For its part, as of December 31, 2021, the official reference exchange rate amounted to 4,597 VED/USD (1,107,199 VES/USD and 46,621 VES/USD as of December 31, 2020 and 2019, respectively).

Telefónica

On the other hand, Argentina became considered a hyperinflationary country in 2018.

To update its financial statements, Telefónica has used the series of indices defined by JG resolution No. 539/18 published by the Argentine Federation of Professional Councils of Economic Sciences (FACPCE), based on the Consumer Price Index (CPI) National, published by the National Institute of Statistics and Censuses (INDEC) of the Argentine Republic and the Wholesale Internal Price Index (IPIM) published by the FACPCE.

The accumulated index as of December 31, 2021, 2020 and 2019 is 582.5%, 385.9% and 283.4%, respectively, while on an annual basis the index for 2021 has been 51% (36 and 30% for 2020 and 2019, respectively).

 

Redacción Opportimes

Publicidad
Mostrar más
Botón volver arriba
A %d blogueros les gusta esto: