Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
TO - SPECIALIZED AUDIT DIVISION
November 13, 1985
FROM - C.B. Darling 957-2114
ATTENTION Claude Lemelin Acting Director
RE: Foreign Exchange Gains and Losses - Banks.
In a September 20, 1985 memo you enclosed a copy of a December 10, 1979 letter from this Directorate to the Department of Finance concerning the reporting of foreign exchange gains and losses by banks.
In response to your specific question there is no change in policy with respect to the catch-up period of foreign exchange gains or losses on income account.
We have recently considered submissions from banks and District Offices as to whether or not liabilities which are otherwise on income account can be considered to be on capital account where a substantial capital asset has been purchased with funds that cannot be traced to a specific borrowing.
In our view a liability should not be considered to be on capital account unless it can be demonstrated that the borrowed funds are being used for capital purposes.
If you wish to discuss this matter further, do not hesitate to contact us.
Director Bilingual Services Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1985
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© Sa Majesté la Reine du Chef du Canada, 1985
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