Foreign exchange fluctuation capitalisation changes asset cost computation, requiring exchange rate variations to be added to or deducted from acquisition cost.
Clause 42 requires capitalization of foreign exchange fluctuations into the cost of assets: an overriding rule mandates accounting for exchange rate variations; the variation is computed as the amount paid in domestic currency less the liability at acquisition; that variation is added to or deducted from the asset's actual cost; where contracts with authorised dealers exist, the contract exchange rate governs measurement, and foreign exchange law is incorporated for definitions and consistency.