Page 11 - Chapter 22 - Foreign Exchange

Section 25D

- Not applicable to exchange items.

- Only applicable to underlying items (e.g. asset, trading stock , income)

- NORMAL RULE: Convert the underlying item to Rand by applying the

spot rate on the date that the:

→ expenditure/loss is incurred; or

→ that the amount was received.

- RULE OF EXCEPTION: Only NP or trust ≠ trade may

ELECT: to rather apply the average exchange rate for the

yoa.

- Person receives/incurs an amount ≠ R and is attributable to PE

outside RSA?

→ Convert the functional currency to R @ average exchange rate.

*Ignore s 25D(2A), (4), (5), (6), (7) – Not part of SAICA syllabus!