Article 61-4Inclusion of the Amount Equivalent to Profits or Losses on Short Selling of Securities in Gross Profits or Deductible Expenses

①In the case where a domestic corporation has conducted the Short Selling of Securities prescribed in Article 61-2, paragraph (21) (Inclusion of Capital Gains or Losses on Securities in Gross Profits or Deductible Expenses) (referred to as "Short Selling of Securities" in the following paragraph), the margin transaction prescribed in paragraph (22) of the Article (referred to as a "margin transaction" in the following paragraph and paragraph (3)), the when issued transaction prescribed in paragraph (22) of the Article (referred to as a "when issued transaction" in the following paragraph and paragraph (3)), or the underwriting of securities (meaning concluding a contract, on the occasion of soliciting an application for the acquisition of newly issued securities, or of making an offer to sell or soliciting an offer to buy already issued securities, to acquire all or part of such securities for the purpose of having them acquired by others, or, where there is no other person to acquire all or part of such securities, to acquire the remainder, and excluding the underwriting of securities for the purpose of acquiring securities not for buying and selling as prescribed in paragraph (1), item (ii) of the preceding Article; the same applies in the following paragraph), when any of such transactions have not been settled as of the end of a business year, the amount equivalent to the profit or loss calculated, as specified by Ministry of Finance Order, by deeming that such transactions were settled at that time (referred to as "deemed settlement profit or loss" in the following paragraph), is included in gross profits or deductible expenses, when calculating the amount of income for the business year.

③In the case where a domestic corporation has acquired securities based on a contract for a margin transaction, etc. (meaning a margin transaction (limited to buying) and a when issued transaction (limited to buying); hereinafter the same applies in this paragraph) (excluding the case where the domestic corporation has acquired the securities based on a contract for a margin transaction, etc. subject to the provisions of Article 61-6, paragraph (1) (Deferment of Profit or Loss by Deferred Hedge Accounting)), the difference between the value of the securities as of the time of the acquisition and the amount that the domestic corporation paid as the consideration for the acquisition of the securities based on a contract for margin transactions, etc. that had caused the acquisition is included in gross profits or deductible expenses, when calculating the amount of income for the business year containing the date of the acquisition.

④The disposition of the deemed settlement profit or loss prescribed in paragraph (1) in the following business year, and other necessary matters concerning the application of the provisions of the preceding three paragraphs are specified by Cabinet Order.