Page 27 - Chapter 22 - Foreign Exchange (Cont.)

Example: Acquisition Of Assets (cont)

The purchase consideration is settled in full on 31

May 2015. No FEC is entered into. A Ltd qualifies

for a s 12C allowance of 20% because the machine is

second-hand. Assume that the spot rates on the

relevant dates are as follows:

• 1 November 2014 FC1 = R6,60

• 28 February 2015 FC1 = R6,74

• 31 May 2015 FC1 = R7,00

Calculate the effect on the taxable income of

A Ltd for the 2015 y.o.a.