23 October 2002 Internal T.I. 2002-0135797 - FOREIGN EXCHANGE LOSSES -- summary under Paragraph 20(1)(f)

A foreign exchange loss realized on the settlement of a foreign currency debt of the taxpayer would be recognized under s. 39(2) rather than under s. 20(1)(f). "For purposes of paragraph 20(1)(f) of the Act, we believe that the time at which the 'principal amount' is to be determined should be at the time of issue and this is the relevant time at which the discount, if any, should also be ascertained." Documents relating to exchangeable debentures can be distinguished on the basis that there was no issue in those cases that paragraph 20(1)(f) was the relevant provision of the Act.