Commentary

D4.202B UK resident companies—investment companies

Corporate tax
Corporate tax | Commentary

D4.202B UK resident companies—investment companies

Corporate tax | Commentary

D4.202B UK resident companies—investment companies

Sterling functional or designated currency and non sterling presentation currency

Separate rules apply for UK resident investment companies. These rules apply where, in accordance with generally accepted accounting practice a UK resident investment company1 prepares its accounts for a period of account in a currency other than sterling and either:

  1.  

    (a)     it has sterling as its designated currency (see below) for that period of account; or

  2.  

    (b)     if it does not have a designated currency for that period, in its accounts for the period it identifies sterling as its functional currency in accordance with generally accepted accounting practice.

In either case it will be required to determine its profits or losses that fall to be computed in accordance with generally accepted accounting practice as if its accounts had been prepared in sterling2.

The rules that are discussed at D4.202A in the case of UK resident trading companies equally apply where a sterling loss is carried forwards or backwards and the UK resident investment company's functional or designated currency for that later or earlier period is not sterling3.

Non-sterling functional or designated currency that differs from presentation currency

There is provision for a UK resident investment company4 to compute its profits or losses that fall to be computed in accordance with generally accepted accounting practice in a non-sterling currency. This provision applies where for a period of account, in accordance with generally accepted accounting practice, the company prepares its accounts in one currency and either5:

  1.  

    (a)    

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