NEW ZEALAND GAZETTE, No. 68

10 JUNE 2004

● you are a member of a group of companies and, on or before the day that is the earlier of 31 July 2004 and the earliest day
that is the end of an accounting period that corresponds to the 2003-04 income year for a member of the group, the
members of the group give to the Commissioner notice in writing of an election:

(a) to use this determination; and

(b) to use Determination G9C: Financial arrangements that are denominated in a currency other than New Zealand dollars:
an expected value approach.

You must use this determination for the 2004-05 income year and a forward contract for which this determination applies if:

● you entered the forward contract after the date of this determination and were required to make a return of your income or
expenditure for the 2003-04 income year on the basis of this determination, Determination G9B: Financial arrangements
that are denominated in a currency other than New Zealand dollars: an expected value approach or Determination G14A;

● you are not a member of a group of companies and, on or before the day that is the later of 31 July 2004 and the 63rd day
of your accounting period that corresponds to the 2004-05 income year, you give to the Commissioner notice in writing
that you elect:

(a) to use this determination; and

(b) to use Determination G9C: Financial arrangements that are denominated in a currency other than New Zealand dollars:
an expected value approach;

● you are a member of a group of companies and, on or before the day that is the later of 31 July 2004 and the earliest day
that is the 63rd day of an accounting period that corresponds to the 2004-05 income year for a member of the group, the
members of the group give to the Commissioner notice in writing of an election:

(a) to use this determination; and

(b) to use Determination G9C: Financial arrangements that are denominated in a currency other than New Zealand dollars:
an expected value approach.

You must use this determination for an income year beginning after the 2004-05 income year and a forward contract for which
this determination applies if:

● you entered the forward contract after the date of this determination and were required to make a return of your income or
expenditure for the 2004-05 income year on the basis of this determination, Determination G9B: Financial arrangements
that are denominated in a currency other than New Zealand dollars: an expected value approach or Determination G14A;

● you entered the forward contract before the date of this determination and you have made a return of your income or
expenditure for an earlier income year and the forward contract on the basis of Determination G14A and are required under
section 90 or sections 90AC and 90AE of the Tax Administration Act 1994 to make a return for the income year and the
financial arrangement under this determination; and

● you are not a member of a group of companies and, on or before the day that is the 63rd day of your accounting period that
corresponds to the income year, you give to the Commissioner notice in writing that you elect:

(a) to use this determination; and

(b) to use Determination G9C: Financial arrangements that are denominated in a currency other than New Zealand dollars:
an expected value approach;

● you are a member of a group of companies and, on or before the earliest day that is the 63rd day of an accounting period
that corresponds to the income year for a member of the group, the members of the group give to the Commissioner notice
in writing of an election:

(a) to use this determination; and

(b) to use Determination G9C: Financial arrangements that are denominated in a currency other than New Zealand dollars:
an expected value approach.

You may not use this determination for an income year unless you are required to do so by the above paragraphs.

What methods can be used to calculate income or expenditure under a Forward Contract for Foreign Exchange and Commodities?

Expected Value Approach

This determination sets out an expected value approach to calculate gross income or expenditure from a forward contract. This
expected value approach can only be used for forward contracts within the scope of this determination, which is narrower
than Determination G14: Forward Contracts for Foreign Exchange and Commodities. If you are required to use this
determination, you must not use Determination G14 for any such forward contract, and you must not use Determination G9A:
Financial Arrangements that are Denominated in a Currency or Commodity other than New Zealand Dollars for any financial
arrangement within the scope of Determination G9C: Financial arrangements that are denominated in a currency other than
New Zealand dollars: an expected value approach.

Mark to Spot Approach

You may use Determination G14: Forward Contracts for Foreign Exchange and Commodities to calculate gross income or
expenditure of any forward contract within the scope of this determination if you are not required to use this determination or
Determination G9C: Financial arrangements that are denominated in a currency other than New Zealand dollars: an expected
value approach.

Alternatively, you may use the mark to market method if you satisfy the requirements of section EH 1 (6) of the Act or the
market valuation method if you satisfy the requirements of section EH 36 of the Act.

You may also use a method allowed by the proviso to section EH 1 (6) of the Act or by section EH 38 (2) of the Act.

How do I use the method set out in this determination?

Under this method, the gross income or expenditure from a forward contract is the total of an expected component and an
unexpected component. A typical forward contract drawn at the forward rate for no consideration, however, has no expected
component.