Foreign exchange (forex): the general translation rule

What is the general translation rule?

Translation is often referred to as 'conversion'. In this fact sheet, we use the term translation.

The general translation rule applies to the translation of amounts of foreign income, expenses and other tax-relevant amounts to Australian dollars. Generally speaking, this applies from 1 July 2003.

Under the general translation rule, all tax-relevant amounts that are denominated in a foreign currency must be translated into Australian currency (unless falling within certain limited exceptions). This enables all gains and losses to be calculated using a common unit of measurement - the Australian dollar.