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HMRC internal manual

Corporate Finance Manual

Accounts drawn up in a foreign currency: FA 2009: transitional rules: carried back losses

Transitional rules: carried back losses

This guidance applies to accounting periods beginning on or after 29 December 2007

There are transitional rules that apply when losses that originate in an accounting period when these new rules apply are carried back into a period before these rules applied.

Where that is the case, the rules at FA93/S92DA will not apply to the loss. Consequently, the loss will be carried back into the earlier period at its sterling equivalent. This ensures that any losses are treated in line with the rules for translating losses that existed in the accounting period during which the loss is offset.

Although the result is that the pre FA 2009 treatment for losses are applied, those losses would still be translated into sterling in line with the FA 2009 rules for obtaining the ‘appropriate exchange rate’ at FA93/S92E(4). CFM64340 has more detail on the ‘appropriate exchange rate’.