27 FEBRUARY NEW ZEALAND GAZETTE 409

specified in this Determination, which has regard to the Market Value of a FundCo Agreement at a particular time.

6.3 The amount of income derived or expenditure incurred by FundCo, in any year in relation to a FundCo Agreement, other than the year in which a base price adjustment is required to be made by FundCo, shall be calculated in accordance with the formula:

a + b – c

where

a = the Market Value of the FundCo Agreement as at the end of that year (such Market Value to be determined after the making of FundCo Variable Payments required to be made on that particular day); and

b = payments made to an Investor by FundCo, in relation to the particular FundCo Agreement, during that year;

and

c = (i) in the year in which FundCo enters into the FundCo Agreement, the core acquisition price for FundCo in relation to the particular FundCo Agreement; and

(ii) in every year, other than the year in which FundCo enters into the FundCo Agreement, the Market Value of the FundCo Agreement at the end of the immediately preceding year (such Market Value to be determined after the making of FundCo Variable Payments required to be made on that particular day).

The amount so calculated shall:

(a) Where it is a positive amount, be deemed to be expenditure incurred by FundCo in the relevant income year; and

(b) Where it is a negative amount, be deemed to be income derived by FundCo in the relevant income year.

6.4 The amount of income derived or expenditure incurred by an Investor, in any year in relation to a FundCo Agreement, other than the year in which a base price adjustment is required to be made by that Investor, shall be calculated in accordance with the formula:

a + b – c

where

a = the Market Value of the FundCo Agreement as at the end of that year (such Market Value to be determined after the making of FundCo Variable Payments required to be made on that particular day); Provided that if the Market Value of that FundCo Agreement is less than the Capital Floor for that income year, then item “a”, for the purposes of this formula shall be equal to the Capital Floor for that year and not the Market Value of the FundCo Agreement as at the end of that year; and

b = payments made to that Investor by FundCo during that year; and

c = (i) in the year in which that Investor becomes a holder in relation to the FundCo Agreement, the core acquisition price for that Investor in relation to the particular FundCo Agreement; and

(ii) in every year, other than the year in which that Investor becomes a holder in relation to the FundCo Agreement, item “a” of this formula for the immediately preceding year.

The amount so calculated shall:

(a) Where it is a positive amount, be deemed to be income derived by an Investor in the relevant income year; and

(b) Where it is a negative amount, be deemed to be expenditure incurred by that Investor in that income year.

Deposit

6.5 In any year other than the year of repayment of the Deposit, the amount of income derived or expenditure incurred by FundCo as holder in respect of the Deposit shall be calculated in accordance with the yield to maturity method.

TradeCo Agreement

6.6 The amount of the core acquisition price of the TradeCo Agreement is to be determined in accordance with paragraph (e)(i) of the definition of “core acquisition price” contained in section OB 1 of the Act. The core acquisition price for TradeCo and FundCo in relation to the TradeCo Agreement is the amount paid to TradeCo by FundCo on entry into the TradeCo Agreement.

6.7 Expenditure incurred or income derived with respect to the TradeCo Agreement shall be calculated using the method specified in this Determination, which has regard to market valuation.

6.8 The amount of income derived or expenditure incurred by TradeCo as issuer, or FundCo as holder, under the TradeCo Agreement, other than the year in which a base price adjustment is required to be made by TradeCo or FundCo (as the case may be), shall be calculated in accordance with the formula:

a + b – c

where

a = the Market Value of the TradeCo Agreement as at the end of that year (such Market Value to be determined after the making of TradeCo Variable Payments required to be made on that particular day); and

b = payments made to FundCo by TradeCo during that year in relation to the TradeCo Agreement; and

c = (i) in the year of entry into the TradeCo Agreement, the core acquisition price for FundCo or TradeCo in relation to the TradeCo Agreement; and

(ii) in every year, other than the year of entry into the TradeCo Agreement, the Market Value of the TradeCo Agreement at the end of the immediately preceding year (such Market Value to be determined after the making of TradeCo Variable Payments required to be made on that particular day) together with any payments made by FundCo to TradeCo during that year.

The amount so calculated shall:

(a) Where it is a positive amount be deemed to be expenditure incurred by TradeCo and income derived by FundCo in the relevant income year; and

(b) Where it is a negative amount be deemed to be income derived by TradeCo and expenditure incurred by FundCo in the relevant income year.

Futures contracts, derivative contracts and foreign exchange contracts

6.9 In any year, other than the year in which a base price adjustment is required to be made in relation to futures contracts, derivative contracts or foreign exchange contracts, the income derived or expenditure incurred by TradeCo with respect to the futures contracts, derivatives contracts and foreign exchange contracts shall be calculated using the method specified in this Determination which has regard to market valuation. Under that method, the income or expenditure in relation to such a contract shall be calculated in accordance with the following formula:

a + b – c