Loan revaluation

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A UK incorporated company, loaned money to Company B (France). The loan is denominated in euros. My question is, do I need to revalue the outstanding loan as of year-end? If so, is the exchange gain taxable and is the loss allowable for CT purposes? I would greatly appreciate it if you could point me to any guidance. The accounts are produced under FRS 102.

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By paul.benny
03rd Nov 2023 16:53

FRS102 can be downloaded without charge from the FRC website. To save you the trouble of looking, the relevant paragraphs are 30.6-30.10.

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By thestudyman
05th Nov 2023 11:59

The easy answer would be yes to recording a revaluation, as a loan is a monetary item, as per guidance of the FRS102 standard. This explains the accounting treatment but not the tax treatment - your company accountant should be able to advise further.

However does the accounting software not do this automatically, I assume it was recorded in Euros?

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