Foreign exchange differences

See Also

Adjustment of profit | Deferred foreign exchange differences brought forward | Expense analysis | Financial Instruments / Derivative Contracts | Grandfathering calculations | Kink test calculations | Loan relationships | Taxable exchange gains

Select from the following headings:

Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors

This schedule enables the user to analyse foreign exchange gains and losses between trading and non-trading and also between 'unrealised long term' and 'other' differences for the purposes of calculating any possible deferral. The analysis is then reconciled to the amounts charged through the profit and loss account or through reserves. This schedule should not be used for exchange gains and losses that fall under the FA 2002 rules. These should be analysed on either the Loan relationships schedule or the Derivative contracts schedule.

The Taxable exchange gains schedule is automatically developed at the same time. This categorises current period taxable gains and losses between trading and non-trading income for exchange differences falling under the FA 1993 rules.

This schedule should not be used for exchange gains and losses that fall under the FA 2002 rules. These should be analysed on either the Loan relationships schedule or the Derivative contracts schedule.

In order for this reconciliation to balance all items analysed on the schedule, amounts should be linked in from the relevant expense analysis schedule by selecting the relevant row.

Type

The selector flag should be set for each gain or loss identified on the schedule so that they are correctly treated in calculating any gain deferral.

Deferral claimed

If you wish to defer any of the gains indicated on the schedule, you may do so by entering the amount to defer in the deferral claimed column.

Any deferral claims entered in this way will carry forward and be included on this schedule in compassion for the next period. The total of any deferrals claimed will automatically check to the total deferral calculated on the Taxable exchange gains schedule.

Where there is a deferral b/f and the new rules apply the user can reverse out the deferral using the Reversal of deferral dealt with under Loan Relationships cell and re-enter the deferral either as a Loan relationship credit, or on the Deferred Exchange gains b/f schedule that can be developed from Loan relationships.