1618 NEW ZEALAND GAZETTE, No. 68 10 JUNE 2004

the Commissioner on or before the earliest day that is the 63rd day of an accounting period for the income year for a member
of the group. The notice must be in writing and elect:

• to use this determination; and
• to use Determination G9C: Financial arrangements that are denominated in a currency other than New Zealand dollars: an
  expected value approach.

How do I calculate the transitional adjustment?

The transitional adjustment must be made for the first income year for which you are required to use this determination for a
forward contract if you entered the forward contract before the income year and you have not been required to apply
Determination G14A for the forward contract. The calculation is comparable to Determination G25: Variations in the Terms of
a Financial Arrangement.

The transitional adjustment requires that for the income year of the adjustment, you treat as gross income or expenditure the
difference between the total amount that would have been gross income or expenditure calculated as described in this
determination and the total amount actually recognised over the previous income years.

How is income or expenditure calculated in the year the forward contract matures or is disposed of?

Regardless of which method you choose to use, you must calculate income or expenditure under the base price adjustment in
whichever of section EH 4 of the Act and section EH 47 of the Act is applicable to the forward contract.

2. Reference—This determination is made pursuant to section 90 (1) (c) and section 90AC (1) (d) of the Tax Administration
   Act 1994.

3. Scope—(1) This determination applies to the calculation of gross income or expenditure from a forward contract for
   foreign exchange and commodities.

(2) This determination does not apply to:

(a) a futures contract;

(b) a security arrangement;

(c) a forward contract for foreign exchange and commodities where the forward rates of the currency cannot be
determined;

(d) any forward contracts covered by the following determinations:

• Determination G19: Exchange Traded Option Contracts;
• Determination G20: Discounted Value of Amounts Payable in Relation to Trade Credits Denominated in a Foreign
  Currency;
• Determination G21: Discounted Value of Amounts Payable in Relation to Deferred Property Settlements
  Denominated in a Foreign Currency;
• Determination G21A: Agreements for Sale and Purchase of Property Denominated in Foreign Currency: Discounted
  Value of Amounts Payable;
• Determination G27: Swaps;
• Determination G29: Agreements for Sale and Purchase of Property Denominated in Foreign Currency: Exchange
  Rate to Determine the Acquisition Price and Method for Spreading Income and Expenditure;

except as specifically allowed by those determinations.

(3) You must use this determination for an income year for a forward contract that satisfies subparagraphs (1) and (2) above if:

(a) the income year is the 2003-04 income year; and

(i) you are not a member of a group of companies and make an election, as described in subparagraph (4) below, that
applies for the 2003-04 income year;

(ii) you are a member of a group of companies and the members of the group make an election, as described in
subparagraph (4) below, that applies for the 2003-04 income year;

(b) the income year is after the 2003-04 income year and

(i) you are not a member of a group of companies and make an election, as described in subparagraph (4) below, that
applies for the income year;

(ii) you are a member of a group of companies and the members of the group make an election, as described in
subparagraph (4) below, that applies for the income year;

(iii) you entered the forward contract after the date of this determination and have been required to use this
determination, Determination G9B or Determination G14A for an earlier income year;

(iv) you entered the financial arrangement before the date of this determination and have used Determination G14A
for an earlier income year and the financial arrangement and are not excluded from the application of this
determination for the income year and the financial arrangement by section 90 (6) or 90AE of the Tax
Administration Act 1994.

(4) An election to use this determination must:

(a) be made in writing to the Commissioner;

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

(c) if you are not a member of a group of companies, be made:

(i) on or before the day that is the earlier of 31 July 2004 and the end of your accounting period that corresponds to
the 2003-04 income year, if the election is to apply for the 2003-04 and subsequent income years;

(ii) 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, if the election is to apply for the 2004-05 and subsequent income years;