Section EX 57 — Income Tax Act 2007: Conversion of foreign currency amounts: most methods

EX 57 Conversion of foreign currency amounts: most methods When this section applies (1) This section applies when— (a) an amount in a foreign currency is the market value of, or is derived from or incurred on, an attributing interest in a FIF that a person has in an income year; and (b) the person is using one of the following calculation methods (the relevant method ) to calculate their FIF income or loss from the interest for the income year: (i) the comparative value method: (ii) the fair dividend rate method: (iii) the deemed rate of return method: (iv) the cost method. Choosing conversion rates (2) The person must choose either that— (a) each foreign currency amount in the income year is converted into New Zealand dollars using the exchange rate on the day for which the market value is determined or on which the amount is derived or incurred; or (b) all foreign currency amounts in the income year are converted into New Zealand dollars at the average of the close of trading spot exchange rates for the 15th day of each month that falls in the income year. Election applying method-wide and for future years (3) The election by the person must be applied for all attributing interests for which they use the relevant method for the income year and each later income year. Defined in this Act: amount , attributing interest , calculation method , close of trading spot exchange rate , comparative value method , cost method , deemed rate of return method , fair dividend rate method , FIF income , FIF loss , income year , New Zealand , Compare: 2004 No 35 ss EX 44(7) , EX 44C(11) , EX 44D(13) , EX 45(15) , EX 45B(17)