Income Tax Assessment Regulations 1997
(item 12 of the table in subsection 960-50(6) of the Act, as modified, and subregulation 960-50.01(2) )
TRANSLATION OF CURRENCY AMOUNTS - RULES AND OTHER REQUIREMENTSPART 1 - RULES AND REQUIREMENTS FOR ITEM 12 OF THE TABLE IN SUBSECTION 960-50(6) OF THE ACT 1.3 CHOICE OF AVERAGE EXCHANGE RATE 1.3(1)
For item 12 of the table in subsection 960-50(6) of the Act, as modified, an entity may, in a period, translate an amount into Australian currency using an exchange rate that is an average of all of the exchange rates that are applicable during a period, not exceeding 12 months, that is chosen by the entity (an average exchange rate ). 1.3(2)
(a) the entity is not permitted to translate an amount using an average exchange rate unless it appears to the entity on reasonable grounds that the rate would be a reasonable approximation of the exchange rate or rates that the entity would have used if the entity had used the exchange rate required by another appropriate item of the table in subsection 960-50(6) of the Act; and
(b) the entity must obtain:
(i) all of the exchange rates that it will use to work out the average exchange rate; or
from 1 or more sources that are not associates of the entity, and not the entity itself, unless the Commissioner notifies the entity that it may obtain the rate or rates from 1 or more specified sources; and
(ii) an average exchange rate that has been worked out for a particular period;
(c) the entity must translate amounts relating to the relevant period using the rate.
Item 12 of the table in subsection 960-50(6) of the Act is available as an alternative to the special translation rules in items 1 to 11A (inclusive) in that table. Therefore, subclause (2) requires the entity to consider whether using the translation rules in item 12 would lead to a reasonable approximation with the translation rules in another appropriate item of the table.
Associate is defined in subsection 995-1(1) of the Act.