CTM76590 - Exchange differences: matching: value of matched asset or liability

For the purpose of a matching election the value of that asset or liability at any time is the value of that asset or liability in the company's accounts.

Suppose, for example, a company borrowed $100,000 to buy a $100,000 holding of shares in an overseas subsidiary. It makes an election to match those shares.

If the value of the shares in the company's accounts fell to, say, $80,000 then $80,000 of the liability would be matched.

If, however, the value of the shares rose to, say, $150,000 then to the extent that the company has eligible liabilities in excess of $100,000, those liabilities would be matched up to a maximum of $150,000.