Redenomination

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Redenomination

A reduction in the face value of a currency that a government or central bank makes because of hyperinflation or chronic weakness as a currency. For example, a country may declare that a "new" dollar is worth 1,000 "old" dollars and print new denominations reflecting this change. This may or may not stem the tide of inflation, depending on how the redenomination is approached and what other steps are taken.
References in periodicals archive ?
tax principles, redenominations generally are not treated either as realization events under section 1001 or a change in functional currency within the meaning of section 985.
Concededly, the euro conversion does not fit neatly within the redenomination criteria.
In addition, because the euro will replace more than one legacy currency, the redenomination approach implicitly treats individual legacy currencies as being the same currency.
Nevertheless, the redenomination approach provides a simple means of achieving U.
TEI believes that conversion to the euro should not be treated as a normal change in functional currency, even though, upon factual analysis, conversion to the euro more closely resembles a change of functional currency than a redenomination.
A country leaving the conversion process during the transition period would probably return to its legacy currency; the dual-currency approach (like the redenomination approach) would ensure that a taxpayer that had not yet elected to change its functional currency to the euro is not treated as making two changes in functional currency.
In addition, redenomination of shares of stock may take the form of a tax-free reorganization, invoking notice requirements under sections 367 and 368, which should be waived.
We expect it to continue to add value after Le Weekend for other redenominations.
Thomson Investment Software (TIS), the leading provider of software products, consulting and client services for the global investment community, today announced that it has licensed its new redenomination solution - ROSIE (Redenomination Of Securities Into Euro) - to three of Europe's largest money managers: Frankfurt-based Deutsche Asset Management, its sister company London-based Morgan Grenfell, and Brussels-based Royale Belge Investment Management.
ROSIE was designed to complement PORTIA's solution by automating redenomination over "Le Weekend" of January 1-4, 1999, when securities issued by 11 of the 15 EMU member countries must be converted into the Euro as mandated by the Maastricht Treaty.
No where else will you find powerful and complex redenomination processing in a simple and easy-to-use format.