Page 115 - SAIT Compendium 2016 Volume2

PN 4/1999 Income Tax acT: PracTIce noTes
PN 4/1999
YEAR END 28-02-1998 Debt
Ruling exchange rates:
Transaction date (10-01-1998) Date of translation (28-02-1998)
Exchange difference:
[(6,4100 – 6,4900) x $300 000]
6,4100 6,4900
Note:
This exchange difference (gain) complies with the provisions of section 24I(5) and the premium on the forward
exchange contract must be spread over the period of the forward exchange contract on a day-to-day basis.
Premium portion:
= [(6,4300 – 6,4900) x $300 000] = R18 000
Portion of the exchange difference which is not a premium (R24 000 – R18 000) or ((6,4300 – 6,4100) x $300 000)
Portion of the premium allocated to the 1998 year of assessment (R18 000 ÷ 3)
Forward exchange contract
Ruling exchange rates:
Transaction date (01-02-1998) Date of translation (28-02-1998)
Exchange difference:[(6,4900 – 6,4900) x $300 000]
YEAR END 28-02-1999 Debt
Portion of the premium of the
exchange difference on 28-02-1998 allocated to the 1999 year of assessment
(R18 000 ÷ 3 x 2)
Debt
Ruling exchange rates:
Date of previous translation (28-02-1998) Date of realisation (10-05-1998)
Exchange difference:
[(6,4900 – 6,5400) x $300 000]
Forward exchange contract
Ruling exchange rates:
Date of previous translation (28-02-1998) Date of realisation (01-05-1998)
Exchange difference:
[(6,4900 – 6,5300) x $300 000]
R6 000 gain R 6 000 gain
6,4900 6,5400
6,4900 6,5300
R12 000 gain
R15 000 gain
R12 000 loss
6,4900 6,4900
R24 000 gain
R nil
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