The state of rapid and excessive increases in the general price (general price index) of goods and services in an economy, as calculated on an accumulated basis for a specific period of time. It is a type of inflation that spins out of control with an accelerated pace of rising prices. In other words, hyperinflation is uncontrollable inflation, indicated by large jumps in price increases during short intervals. Hyperinflation is manifested by macroeconomic factors such as prices, interest and wages linked to a price index, where inflation persists unabated for a period exceeding three years, reaching a level of around 100 per cent or more.

An entity operating in a hyperinflationary economy is required to express its financial statements, including comparative information, in units of the presentation currency (functional currency) standing at the end of a reporting period.

For such an entity, financial statements are restated (if originally prepared on the basis of historical costs, rather than current costs) to current units of a hyperinflationary currency on the basis of a general price index. Differences (gains or losses) on the net monetary position are routed through the income statement for the period. The results and financial position of an entity are typically, and under normal situations, expressed in its functional currency. However, after restatement, the restated statements can be presented in any currency on the basis of translation (currency translation).