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  • Item 2d Other



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    At item 2d you must show values for the listed kinds of expenditure and revenue for your dealings with international related parties not specifically included at other labels in item F2.

    At A include gross expenditure in the nature of interest or discounts. At B include gross revenue in the nature of interest or discounts.

    At C include gross expenditure relating to insurance, such as premiums, and at D include any gross revenue from insurance dealings, including settlements.

    At E and F show the amount of your expenditure and revenue respectively, for derivatives and any other kind of financial transactions, other than a loan, with international related parties.

    For this purpose a financial transaction other than a loan will include guarantees and repurchase agreements.

    For this purpose a derivative is a contractual right that derives its value from the value of something else, such as a debt security, equity, commodity or a specific index. The most common derivative instruments are forwards, futures, options and notional principal contracts such as swaps and credit derivatives. Unlike traditional debt and equity securities, these instruments do not involve a return on an initial investment.

    For many derivative contracts such as notional principal contracts (for example, interest rate swaps), the parties to the contract will often only be liable for amount calculated on a net basis. In these kinds of contracts, only the liability or receivable calculated on this net basis should be included at E or F respectively.

    In other kinds of derivative contracts, only one party becomes liable under the contract (for example, certain forward agreements or option premiums). In these kinds of contracts, the gross amount of the liability incurred, or receivable payable, under the contract should be recorded at E or F respectively.

    Mark-to-market accounting may be used for determining the amounts in respect of derivatives where it is used by the taxpayer for financial accounting purposes.

    Last modified: 28 Sep 2012QC 24214