This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Business Income Manual

Receipts: general: foreign exchange gains and losses

Businesses that prepare accounts under IAS (BIM31025) will recognise and measure foreign exchange gains or losses in accordance with IAS21. Businesses using UK GAAP may have adopted FRS23 `Effect of changes in foreign exchange rates’ or FRS102 section 30. Enterprises can use SSAP20 `Foreign currency translations’, the older accounting standard that deals with exchange translation adjustments until mandatory adoption of FRS102 from accounting periods ended on or after 1 January 2015.

A full description of the treatment of foreign exchange gains and losses is in BIM39500 onwards. There is also a Statement of Practice, SP2/02, that sets out HMRC practice with regard to the exchange gains and losses of unincorporated businesses.