6 December 2011 TEI-CRA Liason Meeting Roundtable Q. 4, 2011-0426981C6 - Functional Currency Reporting -- summary under Subsection 261(20)

CRA confirmed its position respecting the example (first raised at the May 2011 IFA Roundtable), that where a parent with a Canadian dollar functional currency has lent in Canadian dollars to a US dollar functional currency subsidiary, a foreign exchange loss realized by the subsidiary on repayment of the loan will be denied under s. 261(21), noting that this accorded with the words of s. 261(20) and an example in the Finance Explanatory Notes.