Sales revenue that the taxpayer earned in the United States were required to be translated into Canadian dollars at the current rate of exchange when earned notwithstanding that in the taxpayer's financial statements, the sales revenue was translated at the rate of exchange that prevailed when the taxpayer borrowed in U.S. dollars to finance the construction of the nitrogen fertilizer plant that produced the product in question (with such financial statement treatment being based on the sales providing an effective hedge against fluctuations in the exchange rate). Woods J. stated (at para. 46) that:
"In computing revenue or expenses denominated in a foreign currency, a taxpayer must use the foreign exchange rate in effect at the time of the transaction."