CO129-519-4 Adjustment of exchange account- payment of military contribution on profit on exchange 10-9-1929 - 10-6-1931 — Page 4

Gov/47207/25°

H.K.

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In 1923 the Exchange Account disappeared and

all exchange transactions were carried through the

new "Adjustment of Exchange Account" and the balance

ultimately transferred to the "Revenue and Expenditure

Account"

The Director of Colonial Audit having .

queried these arrangements, the matter was referred

home, The Secretary of State ruled (despatch of

26th November 1925) that it was correct to carry

the profits or losses on exchange in ordinary day-to-

day transactions (e.g. Advances, Deposits, Family

Remittances, Passage Refunds etc.) to an "Exchange

Account," the balance of which at the close of the

year is carried to Revenue or Expenditure as the case

may be.

As regards increases or decreases in value

of sterling investments as converted periodically into

dollars for the sole purpose of record in the Accounts,

the Secretary of State considered that these were not

strictly revenuear expenditure, with the proviso that,

in accordance with Colonial Regulations 309 (now 291),

any actual profit or loss resulting from realisation

of such investments or funds should be carried to

revenue or expenditure. In future increases or

decreases in the dollar value of sterling investments

or funds held by the Crown Agents should be carried

to the "Adjustment of Exchange Account," introduced

in 1922, and the balance of this fund should be carried

forward from year to year, appearing as an asset or a

liability as the case may be in the Annual Balance

Sheet of the Colony.

The question of military

contribution