26 U.S.C. § 985 : US Code - Section 985: Functional currency

Search 26 U.S.C. § 985 : US Code - Section 985: Functional currency

(a) In general
Unless otherwise provided in regulations, all determinations
under this subtitle shall be made in the taxpayer's functional
currency.
(b) Functional currency
(1) In general
For purposes of this subtitle, the term "functional currency"
means -
(A) except as provided in subparagraph (B), the dollar, or
(B) in the case of a qualified business unit, the currency of
the economic environment in which a significant part of such
unit's activities are conducted and which is used by such unit
in keeping its books and records.
(2) Functional currency where activities primarily conducted in
dollars
The functional currency of any qualified business unit shall be
the dollar if activities of such unit are primarily conducted in
dollars.
(3) Election
To the extent provided in regulations, the taxpayer may elect
to use the dollar as the functional currency for any qualified
business unit if -
(A) such unit keeps its books and records in dollars, or
(B) the taxpayer uses a method of accounting that
approximates a separate transactions method.
Any such election shall apply to the taxable year for which made
and all subsequent taxable years unless revoked with the consent
of the Secretary.
(4) Change in functional currency treated as a change in method
of accounting
Any change in the functional currency shall be treated as a
change in the taxpayer's method of accounting for purposes of
section 481 under procedures to be established by the Secretary.