①In the case where a domestic corporation has conducted derivative transactions, etc. so as to decrease the net operating loss listed as follows (hereinafter referred to as the "net operating loss on hedged assets, etc." in this Article) (excluding the case where the provisions of paragraph (1) of the next Article apply and limited to the case where the domestic corporation has stated, in books and documents, to the effect that the derivative transactions, etc. aimed to decrease the net operating loss on hedged assets, etc. and has entered other matters specified by Ministry of Finance Order, as specified by Ministry of Finance Order; the same applies in the following paragraph), when any of the assets or liabilities prescribed in item (i), or monies prescribed in item (ii), with which the net operating loss on hedged assets, etc. is to be decreased, have neither been transferred, extinguished, received, nor paid during the period from the time of the derivative transactions, etc. to the end of a business year, and when it falls under the case specified by a Cabinet Order as the case where the derivative transactions, etc. are deemed to be effective to decrease the net operating loss on hedged assets, etc., the portion of the amount of profit or loss from the derivative transactions, etc. (meaning the amount of profit or loss on the settlement of the derivative transactions, etc. (referred to as the "profit or loss on settlement" in paragraph (5)), the deemed settlement profit or loss prescribed in Article 61, paragraph (7) (Capital Gains or Losses and Gains or Losses on the Fair Valuation of Commodities, etc. for Short-Term Trading), the deemed settlement profit or loss prescribed in Article 61-4, paragraph (1) (Inclusion of the Amount Equivalent to Profits or Losses on Short Selling of Securities in Gross Profits or Deductible Expenses), the deemed settlement profit or loss prescribed in paragraph (1) of the preceding Article, and the foreign exchange conversion difference prescribed in Article 61-9, paragraph (2) (Inclusion in Gross Profits or Deductible Expenses of Profits or Losses on the Difference from the Conversion of Assets in a Foreign Currency at the end of the period)), which has been calculated, as specified by Cabinet Order, as the effective portion in order to decrease the net operating loss on hedged assets, etc. (referred to as the "effective profit or loss on settlement" in the following paragraph), is excluded from gross profits or deductible expenses, when calculating the amount of income for the business year, notwithstanding the provisions of Article 61, paragraph (7), Article 61-4, paragraph (1), paragraph (1) of the preceding Article, and Article 61-9, paragraph (2):

②In the case where a domestic corporation has conducted derivative transactions, etc. so as to decrease the net operating loss on hedged assets, etc., when, as a result of a qualified company split or a qualified capital contribution in kind (hereinafter referred to as a "qualified company split, etc." in this paragraph), it transfers the contract pertaining to the derivative transactions, etc. to a succeeding corporation in a company split or a corporation receiving a capital contribution in kind (hereinafter referred to as a "succeeding corporation in a company split, etc." in this paragraph) and, as a result of the qualified company split, etc., transfers the assets or liabilities prescribed in item (i) of the preceding paragraph (limited to those with which the net operating loss on hedged assets, etc. is to be decreased through the derivative transactions, etc.) or the succeeding corporation in a company split, etc. comes to receive or pay the monies prescribed in item (ii) of that paragraph (limited to those with which the net operating loss on hedged assets, etc. is to be decreased through the derivative transactions, etc.) (in the case where the domestic corporation had settled the derivative transactions, etc. before the qualified company split, etc., when, as a result of the qualified company split, etc., it transfers the assets or liabilities prescribed in item (i) of that paragraph (limited to those with which the net operating loss on hedged assets, etc. was to be decreased through the derivative transactions, etc.) or the succeeding corporation in a company split, etc. comes to receive or pay the monies prescribed in item (ii) of that paragraph (limited to those with which the net operating loss on hedged assets, etc. was to be decreased through the derivative transactions, etc.)), the amount equivalent to the effective profit or loss on settlement pertaining to the derivative transactions, etc. that would be calculated pursuant to the provisions of that paragraph if the day preceding the date of the qualified company split, etc. were the last day of a business year is excluded from gross profits or deductible expenses, when calculating the amount of income for the business year containing the date of the qualified company split, etc., notwithstanding the provisions of Article 61, paragraph (8), Article 61-4, paragraph (2), paragraph (2) of the preceding Article and Article 61-9, paragraph (3).

③In the case where a domestic corporation has received, as a result of a qualified merger, qualified company split or qualified capital contribution in kind (hereinafter referred to as a "qualified merger, etc." through to Article 61-8), the transfer of a contract for derivative transactions, etc. that has been conducted so as to decrease the net operating loss on hedged assets, etc. from an acquired corporation, splitting corporation or corporation making a capital contribution in kind (hereinafter referred to as an "acquired corporation, etc." through to Article 61-8), and has received, as a result of the qualified merger, etc., the transfer of assets or liabilities prescribed in paragraph (1), item (i) (limited to assets or liabilities with which the net operating loss on hedged assets, etc. is to be decreased through the derivative transactions, etc.) or has come to receive or pay the monies prescribed in item (ii) of the paragraph (limited to monies with which the net operating loss on hedged assets, etc. is to be decreased through the derivative transactions, etc.) (where an acquired corporation, etc. involved in the qualified merger, etc. subject to the provisions of paragraph (1) or the preceding paragraph had already settled the derivative transactions, etc. that it had conducted so as to decrease the net operating loss on hedged assets, etc. prior to the qualified merger, etc., in the case where the domestic corporation has received, as a result of the qualified merger, etc., the transfer of assets or liabilities prescribed in paragraph (1), item (i) (limited to assets or liabilities with which the net operating loss on hedged assets, etc. is to be decreased through the derivative transactions, etc.) from the acquired corporation, etc., or has come to receive or pay the monies prescribed in item (ii) of the paragraph (limited to monies with which the net operating loss on hedged assets, etc. is to be decreased through the derivative transactions, etc.)), when the acquired corporation, etc. has stated, in books and documents, to the effect prescribed in paragraph (1) and has entered other matters as prescribed in the paragraph, regarding the derivative transactions, etc. wherein the contract has been transferred (where the settlement had been made, the derivative transactions, etc. wherein the settlement had been made; hereinafter the same applies in this paragraph), as specified by Ministry of Finance Order as prescribed in the paragraph, with regard to the application of the provisions of this Article in each business year on or after the business year containing the date of the qualified merger, etc., it is deemed that the domestic corporation has conducted the derivative transactions and has made the entry so as to decrease the net operating loss on hedged assets, etc. pertaining to the assets or liabilities prescribed in paragraph (1), item (i) that it has received as a result of the qualified merger, etc. or the monies prescribed in item (ii) of the paragraph that it has come to receive or pay as a result of the qualified merger, etc.

④The derivative transactions, etc. prescribed in the preceding three paragraphs mean the following transactions (excluding transactions based on a foreign exchange futures contract, etc. as prescribed in Article 61-8, paragraph (2) in the case of being subject to the provisions of the paragraph and transactions as specified by Ministry of Finance Order as prescribed in paragraph (1) of the preceding Article):

⑤The disposition of the portion of the profit or loss on settlement that is the effective profit or loss on settlement prescribed in paragraph (1) in each business year on or after the following business year, and other necessary matters concerning the application of the provisions of the preceding paragraphs are specified by Cabinet Order.