“ruling exchange rate” means, in relation to an exchange item, where such exchange item is –

(a)     a debt in a foreign currency on –

(i)      transaction date, the spot rate on such date;

(ii)     the date it is translated, the spot rate on such date; or

(iii)    the date it is realised, the spot rate on such date:

Provided that where the rate prescribed in respect of a debt in terms of this definition is the spot rate on transaction date or the spot rate on the date on which such debt is realised, and any consideration paid or incurred or received or accrued in respect of the acquisition or disposal of such debt was determined by applying a rate other than such spot rate on transaction date or date realised, such spot rate shall be deemed to be the acquisition rate or disposal rate, as the case may be;

(b)     a forward exchange contract on –

(i)      transaction date, the forward rate in terms of such forward exchange contract;

(ii)     the date it is translated, the market-related forward rate available for the remaining period of such forward exchange contract or in respect of a forward exchange contract which is an affected contract, the forward rate in terms of such forward exchange contract;

(iii)    the date it is realised, the spot rate on such date; or

(c)     a foreign currency option contract on –

(i)      transaction date, a nil rate;

(ii)     the date it is translated –

(aa)   in relation to a foreign currency option contract which is not an affected contract, the rate obtained by dividing the market value of such foreign currency option contract on that date by the foreign currency amount as specified in such foreign currency option contract; or

(bb)   in relation to a foreign currency option contract which is an affected contract, the rate obtained by dividing any amount included or deducted, as the case may be, in terms of subsection (3)(b) by the foreign currency amount, as specified in such affected contract;

(iii)    the date it is realised, the rate obtained by dividing the market value of such foreign currency option contract on that date by the foreign currency amount as specified in such foreign currency option contract: Provided that where such foreign currency option contract is realised by the disposal thereof, the rate shall be obtained by dividing the amount received or accrued as a result of the disposal of such foreign currency option contract, by the foreign currency amount as specified in such foreign currency option contract:

(d)     an amount which constitutes a unit of currency, on-

(i)      transaction date, the spot rate on that date;

(ii)     the date it is translated, the spot rate on that date; or

(iii)    the date it is realised, the spot rate on that date:

: Provided that the Commissioner may, having regard to the particular circumstances of the case, prescribe an alternative rate to any of the aforementioned prescribed rates to be applied by a person in such particular circumstances, if such alternative rate is used for the purposes of financial reporting pursuant to IFRS;

[Proviso substituted by section 44 of Act 25 of 2015 effective on 8 January 2016]