Why do Mexican accounting standards require all nonmonetary assets and liabilities to be restated in terms of purchasing power of the Mexican currency?

Question

Quizplus · Accepted Answer

Mexican accounting standards require all nonmonetary assets and liabilities to be restated in terms of purchasing power of the Mexican currency to reflect the high rates of inflation that Mexico has experienced. This is done to ensure that the financial statements accurately represent the current value of assets and liabilities in the face of inflation.

Why Do Mexican Accounting Standards Require All Nonmonetary Assets and Liabilities