Page 81 - P6 Slide Taxation - Lecture Day 4
P. 81
***When the contract is realised by its disposal:
Rate = Currency received/accrued from disposal divided by
the foreign currency specified in the contract.
• Market value of an FCOC?
→ Practice using a market-related valuation method for
accounting purposes, or
→ Intrinsic value
• Intrinsic value
→ When calculated on year-end:
= (Spot rate on TLD – Option strike rate) x
Amount of foreign currency as specified in FCOC
→ When calculated on realisation date:
= (Spot rate on RD – Option strike rate) x
Amount of foreign currency as specified in FCOC
