The second component of income--section 987 gain or loss--generally can be described as the portion of
currency gain or loss recognized upon remittance from a Section 987 QBU.
The proposed regulations are reserved on how to treat debt-for-debt "exchanges" in the same nonfunctional
currency, and include an example that assumes that a borrower would both realize and recognize a
currency loss on the redenomination of a foreign-
currency borrowing in the absence of the regulations; see Prop.
The first session in February 2004 addressed
currency risk in banking systems.
Unlike the Bank of Japan, the Asian central banks--and lately the Chinese central bank also have felt the need to avoid
currency risk by diversifying their foreign exchange portfolios.
But Caterpillar and Komatsu seem to have decided that it makes little sense to bet their businesses on the uncontrollable, perhaps unfathomable decisions of central bankers and
currency traders.
This program will ensure that people all over the world know the new
currency is coming, and help them recognize and use the security features.
Economic policy analysts and formulators have been kept busy in recent years deciding if or when China should cease to peg the value of its
currency, the yuan, to the U.
Says Steil: "Salvation lies in the Salvadoran solution, dollarization; the continued march of euro-ization; and perhaps the spread of a single Asian
currency built on the back of political reconciliation between Japan and China.
Which isn't a bad metaphor for the
currency that came into the world with the stated ambition of knocking off the dollar as a reference
currency, or at least rivaling it.
Soon every other Asian
currency would slip down with it and, by the end of the summer, the economies of Indonesia, Malaysia, and Thailand would be plummeting like Icarus.
But after years of belt-tightening to meet entry requirements for the single
currency, wild celebrations aren't likely to welcome the euro.
Local
currency works on the same principle, but instead of a central computer recording transactions, locally-issued dollars change hands.
On the other hand, this
currency can't be costly to produce.
If an organization maintains accounts receivables or payables in a foreign
currency or has an office in a foreign country with expenses and revenues recorded in that country's
currency, it will need an accounting system powerful enough to accommodate this.
