Part 2Calculation of liability in respect of profits
Chapter 4Currency
Translating amounts into other currencies
11Sterling equivalents: basic rule
1
Subsection (2) applies if, for the purposes of calculating the profits or losses of a company arising in an accounting period, section 7(2), 8(2) or 9(2) requires a profit or loss to be translated into its sterling equivalent.
2
The translation must be made by reference to—
a
the average exchange rate for the accounting period, or
b
the rate mentioned in subsection (3).
3
That rate is—
a
if the amount to be translated relates to a single transaction, an appropriate spot rate of exchange for the transaction, or
b
if the amount to be translated relates to more than one transaction, a rate of exchange derived on a just and reasonable basis from appropriate spot rates of exchange for those transactions.
4
Subsection (2) is subject to sections 12 and 13 (special rules where the translation is for the purpose of calculating carried-forward or carried-back amounts).