(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 units 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 taxpayers method of accounting for purposes of section
481 under procedures to be established by the Secretary.
