BSP

Clarifies the treatment of foreign currency transactions for financial reporting and internal revenue tax purposes.   The Table below shows the differences between the foreign exchange (forex) gains/losses recognized in the financial statements prepared under the Philippine Financial Reporting Standards (PFRS)/Philippine Accounting Standards (PAS) and the forex gains/losses as income or allowable deduction for Income Tax purposes.  PARTICULARS  PFRS  CURRENT TAX TREATMENT  Initial measurement of foreign currency transactions  All foreign currency transactions are recorded in the entity’s functional currency using the spot rate of exchange at transaction date.  Foreign currency transaction are translated into Philippine Peso using the prevailing interbank reference [...]