Commentary

D1.851 Exchange gains and losses

Corporate tax
Corporate tax | Commentary

D1.851 Exchange gains and losses

Corporate tax | Commentary

D1.851 Exchange gains and losses

Accounting periods beginning on or after 1 January 2016

For accounting periods beginning on or after 1 January 2016 any exchange movements that arise in respect of a derivative contract that are recognised in a company's accounts as an item of profit and loss are included in computing its accounting profits1.

Any exchange gains or losses that arise as a result of the translation of the assets, liabilities, income and expenses of all or part of a company's business from the functional currency of the business, or that part of the business, into another currency are disregarded for the purposes of the derivative contracts legislation where such amounts are recognised in the company's accounts as an item of other comprehensive income2.

Exchange movements arising as a result of the change to the functional currency of an investment company are also disregarded in computing the company's derivative contract profits. This exclusion does not apply, however, to any exchange movements arising as a result of a change in the designated currency of an investment company (under CTA 2010, s 9A the designated currency of an investment company is treated in the same way as if it were

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