Читать книгу International Taxation - Adnan Islam - Страница 75

X is a calendar-year corporation with the dollar as its functional currency. X is on the accrual method of accounting. On January 15, 20X2, X sells inventory for CAD 10,000. The spot rate on January 15, 20X2, is CAD 1 = USD 0.55. On February 23, 20X2, when X receives payment of the CAD 10,000, the spot rate is CAD 1 = USD 0.50. On February 23, 20X2, X will realize exchange loss. X’s loss is computed by multiplying the CAD 10,000 by the spot rate on the date the CAD 10,000 are received (CAD 10,000 × .50 = USD 5,000) and subtracting from that the amount computed by multiplying the CAD 10,000 by the spot rate on the booking date (CAD 10,000 × .55 = USD 5,500). Therefore, X’s exchange loss on the transaction is USD 500 (USD 5,000 – USD 5,500).

Exchange gain or loss on a forward, futures, and option contract (but not a spot contract to buy or sell nonfunctional currency unless the spot contract is disposed of prior to making or taking delivery of the currency) is realized and recognized.

Gain or loss on these contracts is realized. In general, exchange gain or loss is not realized solely because another transaction or transactions offset the transaction. If, however, the economic benefit is derived in any offset transaction, any gain inherent in the offset positions is recognized.

Exchange gain or loss on these contracts is determined by subtracting the amount paid (or deemed paid), if any, for the contract from the amount received or deemed received from the contract. This rule also applies if the taxpayer makes or takes delivery in connection with these contracts. Gain or loss is recognized as if the contract was sold for its fair market value on the delivery date.