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All,
I am trying to understand how investments and accounted for under FRS102. I have a client with several hundred thousand pounds worth of unlisted investments which are held in US dollars. At present these are valued at cost but my limited understanding of FRS102 means that these have to be shown at fair value - which I take to mean at current exchange rates - at the end of the financial year.
Since most of these were purchased when the US dollar was around 1.70, valuing them at today's rate will mean a large increase in their value. FRS102 states that this value has to be taken to the P & L. My question is about the tax treatment of such a "profit". Since the profit isn't realised until the investment is disposed of I assume that no tax is actually due? If that's the case, how would the change in value be accounted for?
Edited at 07 Dec 2016 04:01 PM GMT
Edited at 07 Dec 2016 04:04 PM GMT
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