CFM64450 - Accounts drawn up in a foreign currency: rates used for translation: FA09 transitional rules

CTA10/SCH2/PARAS 11-16

This guidance applies to accounting periods beginning on or after 29 December 2007, unless an election was made to defer the start date of the FA09 changes to the first accounting period beginning on or after 21 July 2009, see CFM64480.

Transitional rules are required to deal with the position where losses cross over between the new rules and the old rules. This would occur in two situations:

Carry back losses

When losses originate in an accounting period to which the new rules apply but are carried back and offset against an accounting period when the new rules do not apply.

CFM64460 has detail on the specific rules.

Carry forward losses

When losses originated in an accounting period before the new rules applied but are carried forward and offset against profits in an accounting period to which the new rules apply.

CFM64470 has detail on the specific rules.

The transitional rules will apply to all companies unless an election is made to disapply them. CFM64480 has more detail on the election.