1412 NEW ZEALAND GAZETTE No. 62

payment to be made under the contract valued at the forward rate; and

(c) the base currency value of the non-base currency payment to be made under the contract valued at the contract rate.

(5) You must convert the base currency payments into NZD using forward rates at the time you become a party to the financial arrangement, if the base currency is not NZD.

(6) The expected NZD net amount is the difference between items (b) and (c) in sub-paragraph (4), adjusted for any amount as described in item (a). You must spread the expected NZD net amount using the yield to maturity method consistent with Determination G3 and, where necessary, allocate it to the income year on the basis of Determination G1A. This will give the expected component for each income year.

(7) You must spread the expected NZD net amount of a forward contract that has been written for no consideration at a rate other than the forward rate using the straight-line method.

(8) The unexpected component is the difference between the actual NZD value of the payments during the year and the expected NZD value of those payments as calculated under sub-paragraph (5). You need not calculate the unexpected component separately as it is part of the base price adjustment required under section EH 4 of the Act.

Transitional Adjustment for Existing Forward Contracts for Foreign Exchange and Commodities

(9) If you elect to use this determination to calculate gross income or expenditure of any forward contract entered into before the income year you made the election, you must follow the method set out in sub-paragraphs (1) to (8) to calculate gross income or expenditure of these contracts, except that

(a) the NZD net amount to be spread under sub-paragraph (6) consists of actual NZD payments that have occurred since you became a party to the forward contract until the end of the income year you elect to use this determination, and expected NZD payments in the remaining term of the forward contract; and

(b) the expected NZD payments in the remaining term of the forward contract must be calculated on the basis of the forward rates available at the end of the income year you elect to use this determination.

(10) You must perform a transitional adjustment calculation in the income year in which you elect to use this determination to calculate gross income or expenditure of any forward contract entered into before the income year you made the election. You must perform the transitional adjustment calculation for each of those forward contracts in accordance with the following formula:

a - b - c + d

where

a is the sum of all amounts that would have been income in respect of the forward contract from the time it was entered into until the end of the income year, if this determination was applied from the time you became a party to the forward contract;

b is the sum of all amounts that would have been expenditure in respect of the forward contract from the time it was entered into until the end of the income year, if this determination was applied from the time you became a party to the forward contract;

c is the sum of all income in respect of the forward contract since it was acquired until the end of the previous income year;

d is the sum of all expenditure in respect of the forward contract since it was acquired until the end of the previous income year.

A positive net amount is gross income while a negative net amount is gross expenditure in the income year you elect to use this determination.

7. Examples

(1) A New Zealand corporate borrower enters into a long term forward foreign exchange contract to buy 1 million US dollars (USD) against delivery of New Zealand dollars (NZD) in 2 years time. The contract was entered into on 30 April 1999 for no consideration and the corporate borrower has a balance date of 30 June. The contract rate is 0.5919 USD to 1 NZD, so settlement will require delivery of NZD 1,689,475. The corporate chooses NZD as the base currency for this contract.

(2) At the time the New Zealand corporate becomes a party to the forward contract, the expected NZD net amount is zero and so the expected component of the gross income or expenditure from the forward contract is zero. The New Zealand corporate will recognise the unexpected component of the gross income or expenditure from the forward contract when performing the base price adjustment under section EH 4 of the Act.

Signed on the 27th day of April 1998.

ROBIN OLIVER, General Manager, Policy.

g02928

Internal Affairs

Bylaws Act 1910

Palmerston North Cat Control Bylaw 1997 Confirmed

The following certificate has been executed on a copy of the Palmerston North Cat Control Bylaw 1997 made by special order of The Palmerston North City Council on 26 May 1997, and confirmed at a subsequent meeting of the council held on 23 June 1997.

Dated this 21st day of April 1998.

HON. MAURICE WILLIAMSON, Minister of Local Government.

g02986

Certificate of Confirmation

Pursuant to the Bylaws Act 1910, I hereby confirm the Palmerston North Cat Control Bylaw 1997, and declare that the same came into force on 1 July 1997.

Signed at Wellington this 21st day of April 1998.

HON. MAURICE WILLIAMSON, Minister of Local Government.

g02986

Palmerston North Dog Control Bylaw 1997 Confirmed

The following certificate has been executed on a copy of the Palmerston North Dog Control Bylaw 1997 made by special order of The Palmerston North City Council on 26 May 1997, and confirmed at a subsequent meeting of the council held on 23 June 1997.

Dated this 21st day of April 1998.

HON. MAURICE WILLIAMSON, Minister of Local Government.