GIM6120 - Technical provisions: accounting periods beginning before 1 January 2000: exchange gains and losses

A provision for claims outstanding is regarded as a qualifying liability for the purposes of the Forex rules in Chapter 2 Part 2 FA 1993 for periods beginning before 1 October 2002 (FA93/S153 (2)(b) and FA93/S153 (7)).

Accordingly exchange gains and losses arising as a result of translation of the provision as disclosed in the accounts of the company fall to be taken into account as trading receipts or expenses.