Page 118 - SAIT Compendium 2016 Volume2

PN 4/1999
YEAR END 28-02-1998
Loan (payable in German mark) Ruling exchange rates:
Transaction date (01-11-1997) Date of translation (28-02-1998)
Exchange difference:
[(3,5400 – 3,6300) x DM500 000]
YEAR END 28-02-1999
Loan (payable in German mark)
Ruling exchange rates:
Previous date of translation (28-02-1998) Date of realisation (01-05-1998)
PN 4/1999
Income Tax acT: PracTIce noTes
(When the type of currency in which an exchange item is re ected, is changed, then it is considered to be a realisation of that exchange item and the creation of a new exchange item)
Exchange difference:
[(3,6300 – 3,6900) x DM500 000]
Loan (payable in dollars)
Ruling exchange rates:
Transaction date (01-05-1998) Date of realisation (31-10-1998)
(The new exchange item arises automatically on the realisation of the old exchange item)
Exchange difference:
[(6,2298 – 6,4850) x (DM 500 000 ÷ 1,6883)]
NET TAX RESULT
(-R45 000 – R30 000 – R75 571)
RECONCILIATION
Rand equivalent on transaction date (DM 500 000 x 3,5400)
Rands paid on date of realisation [(DM 500 000 ÷ 1,6883) x 6,4850] = [$296 156 x 6,4850]
Net loss
R30 000 loss
3,5400 3,6300
3,6300 3,6900
6,2298 6,4850
R45 000 loss
R75 571 loss R150 571 loss
R 1 770 000 R1 920 571
R 150 571
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SAIT CompendIum oF TAx LegISLATIon VoLume 2