3‑55 Adjustment—asymmetric foreign curre

3‑55 Adjustment—asymmetric foreign currency gains or losses

(1) This section applies if a Constituent Entity’s accounting functional currency for a Fiscal Year is different from its tax functional currency for the Fiscal Year. (2) In computing the Constituent Entity’s GloBE Income or Loss for the Fiscal Year, adjust the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year so as to include a particular amount of taxable income or loss to the extent that: (a) the particular amount is: (i) attributable to fluctuations in the exchange rate between the accounting functional currency and tax functional currency; and (ii) included in computing the Constituent Entity’s taxable income or loss; and (iii) not included in the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year; or (b) the particular amount is: (i) attributable to fluctuations in the exchange rate between the tax functional currency and another currency that is not the accounting functional currency; and (ii) not included in the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year (whether or not the particular amount is included in the Constituent Entity’s taxable income or loss). (3) In computing the Constituent Entity’s GloBE Income or Loss for the Fiscal Year, adjust the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year so as to exclude a particular amount of income or loss to the extent that: (a) the particular amount is: (i) attributable to fluctuations in the exchange rate between the accounting functional currency and tax functional currency; and (ii) included in the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year; and (iii) not included in computing the Constituent Entity’s taxable income or loss; or (b) the particular amount is: (i) attributable to fluctuations in the exchange rate between the accounting functional currency and another currency that is not the tax functional currency; and (ii) included in the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year; and (iii) not included in computing the Constituent Entity’s taxable income or loss. (4) To avoid doubt, disregard the operation of subsections (2) and (3) in determining whether the condition in subparagraph (2)(a)(iii) or (b)(ii) or (3)(a)(ii) or (b)(ii) is met.