Part 2Calculation of liability in respect of profits
Chapter 4Currency
The currency to be used in tax calculations
7UK resident company operating in currency other than sterling and preparing accounts in another currency
(1)
This section applies if, for a period of account, in accordance with generally accepted accounting practice—
(a)
a UK resident company prepares its accounts in one currency,
(b)
in those accounts it identifies another currency as its functional currency, and
(c)
that other currency is not sterling.
(2)
Profits or losses of the company for the period that fall to be calculated in accordance with generally accepted accounting practice for corporation tax purposes must be calculated in sterling as follows—
Step 1
Calculate those profits or losses in the functional currency as if the company prepared its accounts in that currency.
Step 2
Take the sterling equivalent of those profits or losses (see section 11).
(3)
If this section applies, assume that any sterling amount mentioned in the Corporation Tax Acts is its equivalent expressed in the functional currency of the company.