Income Tax Assessment Act 1997

CHAPTER 6 - THE DICTIONARY  

PART 6-1 - CONCEPTS AND TOPICS  

Division 960 - General  

Subdivision 960-C - Foreign currency  

SECTION 960-50   Translation of amounts into Australian currency  

960-50(1)    
For the purposes of this Act, an amount in a *foreign currency is to be translated into Australian currency.

Examples of an amount

960-50(2)    
The following are examples of an amount:

(a)    an amount of *ordinary income;

(b)    an amount of an expense;

(c)    an amount of an obligation;

(d)    an amount of a liability;

(e)    an amount of a receipt;

(f)    an amount of a payment;

(g)    an amount of consideration;

(h)    a value.

960-50(3)    
The amounts set out in paragraphs (2)(b) to (h) may be amounts on revenue account, capital account or otherwise.

Amounts that are elements in the calculation of other amounts

960-50(4)    
In applying this section:

(a)    first, translate any amounts that are elements in the calculation of other amounts (except *special accrual amounts); and

(b)    then, calculate the other amounts.

Special accrual amounts

960-50(5)    
In applying this section:

(a)    calculate a *special accrual amount without translation; and

(b)    then, translate the special accrual amount.

Special translation rules

960-50(6)    

The table has effect:

Special translation rules
Item	In this case...	this is the result...
1	forex realisation event 4 happens when you cease to have an obligation, or a part of an obligation, to pay *foreign currency, and neither of subparagraphs 775-55(1)(b)(ii) and (iii) applies	for the purposes of section 775-55, the amount of the obligation, or the part of the obligation, at the tax recognition time (see subsection 775-55(7)) is to be translated to Australian currency at the exchange rate applicable at that time.
2	cost of a *depreciating asset	(a) if you incur an obligation in return for your starting to hold the asset, and the obligation is not satisfied before you begin to hold the asset (worked out under Division 40) - the cost of the asset is to be translated to Australian currency at the exchange rate applicable when you begin to hold the asset; or
		(b) if you incur an obligation in return for your starting to hold the asset, and the obligation is satisfied before you begin to hold the asset (worked out under Division 40) - the cost of the asset is to be translated to Australian currency at the exchange rate applicable when the obligation is satisfied.
3	value of an item of *trading stock on hand at the end of an income year, where you have elected to use its *cost	the value is to be translated to Australian currency at the exchange rate applicable at the time when the item became on hand.
4	value of an item of *trading stock on hand at the end of an income year, where you have elected to use:	the value is to be translated to Australian currency at the exchange rate applicable at the end of the income year.
	(a) its market selling value; or
	(b) its replacement value
5	a transaction or event that: (a) involves an amount of money or the *market value of other property; and (b) is relevant for the purposes of Part 3-1 or 3-3; to the extent to which the amount or value is relevant for the purposes of Part 3-1 or 3-3	the amount or value is to be translated, for the purposes of Part 3-1 or 3-3, to Australian currency at the exchange rate applicable at the time of the transaction or event.
6	an amount of *ordinary income	(a) if the amount is received at or before the time when it is *derived - the amount is to be translated to Australian currency at the exchange rate applicable at the time of receipt; or
		(b) in any other case - the amount is to be translated to Australian currency at the exchange rate applicable when it is derived.
7	an amount of *statutory income (other than an amount included in assessable income under Division 102)	(a) if the amount is received at or before the time when the requirement first arose to include it in your assessable income - the amount is to be translated to Australian currency at the exchange rate applicable at the time of receipt; or
		(b) in any other case - the amount is to be translated to Australian currency at the exchange rate applicable at the time when the requirement first arose to include it in your assessable income.
8	an amount that you deduct (other than under Division 40)	(a) if the amount is paid at or before the time when it became deductible - the amount is to be translated to Australian currency at the exchange rate applicable at the time of payment; or
		(b) in any other case - the amount is to be translated to Australian currency at the exchange rate applicable at the time when it became deductible.
9	an amount that is relevant for the purposes of quantifying: (a) the total of all of a company ' s *production expenditure on a *film; or (b) the total of the company ' s *qualifying Australian production expenditure on a film; or (c) the company ' s *total film expenditure on a film; to the extent to which the amount is relevant for the purposes of issuing a certificate under section 376-20 or 376-65	the amount is to be translated to Australian currency at the exchange rate applicable at the time when principal photography commences or production of the animated image commences.
9A	an amount that is relevant for the purposes of quantifying: (a) the total of all of a company ' s *production expenditure on a *film; or (b) the total of the company ' s *qualifying Australian production expenditure on a film; to the extent to which the amount is relevant for the purposes of issuing a certificate under section 376-45	the amount is to be translated to Australian currency at the exchange rate applicable when *post, digital and visual effects production for the film commences.
9B	subject to item 9C, an amount that is relevant for the purposes of quantifying: (a) the total of all of a company ' s *production expenditure on a *film; or (b) the total of the company ' s *qualifying Australian production expenditure on a film; or (c) the company ' s *total film expenditure on a film; to the extent to which the amount is relevant for the purposes of calculating an amount of a *tax offset under section 376-15, 376-40 or 376-60	the amount is to be translated to Australian currency at the average of the exchange rates applicable from time to time during the period that qualifying Australian production expenditure is incurred on the film.
9C	an amount that is relevant for the purposes of quantifying: (a) the total of all of a company ' s *production expenditure on a *film; or (b) the total of the company ' s *qualifying Australian production expenditure on a film; or (c) the company ' s *total film expenditure on a film; to the extent to which the total of the company ' s qualifying Australian production expenditure on a film is less than $15 million and the amount is relevant for the purposes of calculating an amount of a *tax offset under section 376-60	the amount is to be translated to Australian currency at the exchange rate applicable at the time when expenditure is incurred on the film
9D	an amount that is relevant for the purposes of quantifying a company ' s *qualifying Australian development expenditure on a *digital game incurred in *completing the game to the extent to which the amount is relevant for the purposes of: (a) a certificate under subsection 378-25(1) (completion certificate) in relation to the game; or (b) a determination under section 378-30 in relation to such a certificate	the amount is to be translated to Australian currency at the average of the exchange rates applicable from time to time during the period: (a) starting at the earliest time that the company incurred *development expenditure on the game in *completing the game; and (b) ending at the earlier of: (i) the last time the company incurred development expenditure on the game in completing the game; and (ii) the time the company applies for the issue of a certificate under section 378-25(1) (completion certificate) in relation to the game.
9E	an amount that is relevant for the purposes of quantifying a company ' s *qualifying Australian development expenditure on a *digital game incurred in *porting the game to the extent to which the amount is relevant for the purposes of: (a) a certificate under section 378-25(3) (porting certificate) in relation to the game; or (b) a determination under section 378-30 in relation to such a certificate	the amount is to be translated to Australian currency at the average of the exchange rates applicable from time to time during the period: (a) starting at the earliest time that the company incurred *development expenditure on the game in *porting the game; and (b) ending at the earlier of: (i) the last time the company incurred development expenditure on the game in porting the game; and (ii) the time the company applies for the issue of a certificate under subsection 378-25(3) (porting certificate) in relation to the game.
9F	an amount that is relevant for the purposes of quantifying a company ' s *qualifying Australian development expenditure on a *digital game or games incurred in an income year on the *ongoing development of the games in the income year to the extent to which the amount is relevant for the purposes of: (a) a certificate under subsection 378-20(5) (ongoing development certificate) in relation to the games for the income year; or (b) a determination under section 378-30 in relation to such a certificate	the amount is to be translated to Australian currency at the average of the exchange rates applicable from time to time during the period: (a) starting at the earliest time that the company incurred *development expenditure on the games in the income year on the *ongoing development of the games in the income year; and (b) ending at the earlier of: (i) the last time the company incurred development expenditure on the games in the income year on the ongoing development of the games in the income year; and (ii) the time the company applies for the issue of certificate under subsection 378-25(5) (ongoing development certificate) in relation to the games for the income year.
10	an amount that Division 12 of Part 2.5 in Schedule 1 to the Taxation Administration Act 1953 requires to be withheld from a payment	the amount is to be translated to Australian currency at the exchange rate applicable at the time when the amount is required to be withheld under that Division.
11	an amount of a receipt or a payment, where none of the above items apply	the amount is to be translated to Australian currency at the exchange rate applicable at the time of the receipt or payment.

960-50(7)    
Subsection (6) has effect subject to any modifications made by the regulations.

960-50(7A)    

Despite subsections (6) and (7) , an amount that is relevant for the purposes of quantifying, for the purposes of section 960-565 , the *annual global income of an entity as shown in *global financial statements for the entity is to be translated into Australian currency at the average exchange rate applicable for the period for which the statements are prepared.

960-50(7B)    

For the purposes of subsection (7A) :

(a)    the entity must obtain:

(i) all of the exchange rates that it will use to work out the average exchange rate; or

(ii) an average exchange rate that has been worked out for the period referred to in that subsection;

from one or more sources that are not *associates of the entity, and not the entity itself, or from one or more sources specified by the Commissioner in a notice to the entity; and

(b)    the entity must use the average exchange rate so worked out in translating into Australian currency any amount referred to in that subsection that is relevant to that period.

960-50(7C)    

A notice under paragraph (7B)(a) is not a legislative instrument.

Regulations about translation

960-50(8)    
An entity must comply with the regulations (if any) in translating an amount into Australian currency.

Note:

For example, the regulations could require the use of a particular translation method and require consistency in the use of the translation method.

960-50(9)    
Regulations made for the purposes of subsection (8) may make provision in relation to a matter by applying, adopting or incorporating (with or without modifications) matter contained in any of the *accounting standards:

(a)    as in force or existing at a particular time; or

(b)    as in force or existing from time to time.

960-50(9A)    

Regulations made for the purposes of subsection (8) do not apply to translating an amount into Australian currency under subsection (7A) , unless they provide otherwise.

Operation of certain provisions unaffected

960-50(10)    
This section does not affect the operation of the following provisions:

(aa)    

section 220-110 (*maximum franking credit);

(a)    section 775-210 (notional loans under *facility agreements);

(b)    Subdivision 960-D (functional currency);

(c)    subsection 974-35(6) (valuation of financial benefits for the purposes of the debt/equity provisions).

(d) (Repealed by No 114 of 2010)