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TAX IMPLICATIONS RELATED TO THE …

Draft for comments The Malaysian Institute of Certified Public Accountants TAX IMPLICATIONS RELATED TO THE implementation OF FRS 121: THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES Prepared by: Joint Tax Working Group on FRS Draft for comments Tax IMPLICATIONS RELATED to the implementation of FRS 121: The Effects of Changes in Foreign Exchange Rates Contents Page No. 1 Introduction 1 Background of FRS 121 Rationale Scope of FRS 121 Definition of essential terms Effective date 1 1 1 1 2 Scope of the comments 1 3 Changes introduced by the FRS regime 2 The MASB Regime (MASB 6) 2 Foreign Currency Transactions 2 Financial Statements of Foreign Operations 2 The FRS Regime (FRS 121) 2 Foreign Currency Transactions 2 4 Tax treatment before FRS implementation 3 5 Tax issues arising from FRS 121 implementation 3 Claim of capital allowances 3 Translation of functional currency to presentation currency 4 Valuation of inventories 5 Comparison of FRS conversion and actual RM figure 6 Computation of interest restriction 8 6 International tax practices 8 Singapore 8 Hong Kong 8 7 Proposals/ Recommendations of tax treatments 9 Draft for Comments Tax IMPLICATIONS RELATED to the implementation of FRS 121.

Draft for comments Tax Implications Related to the Implementation of FRS 121: The Effects of Changes in Foreign Exchange Rates Contents Page

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