Article 61-9Inclusion 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

①In the case where a domestic corporation holds the following assets and liabilities (hereinafter referred to as "assets, etc. in a foreign currency" in this Division) as of the end of a business year, the amount in Japanese yen of the assets, etc. in a foreign currency as of the time is to be the amount converted by the method specified in the following items in accordance with the category of the assets, etc. in a foreign currency (with regard to the assets, etc. in a foreign currency listed in item (i), item (ii)(b), and item (iii), by a method that the domestic corporation selected from those prescribed in these provisions, and when the domestic corporation had not selected any method, by a method from those prescribed in these provisions that is specified by Cabinet Order):

②In the case where a domestic corporation holds assets, etc. in a foreign currency (limited to those whose amount is converted into the amount in Japanese yen by the conversion method at the current exchange rate; hereinafter the same applies in this paragraph) as of the end of a business year, the amount equivalent to the difference between the amount of the assets, etc. in a foreign currency that is converted into Japanese yen by the conversion method at the current exchange rate and their book value as of the time (referred to as the "foreign exchange conversion difference" 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 transfers assets, etc. in a foreign currency (limited to those whose amount would be converted into the amount in Japanese yen by the conversion method at the current exchange rate if the day preceding the date of the qualified company split, etc. were the last day of a business year; hereinafter the same applies in this paragraph) to a succeeding corporation in a company split, a corporation receiving a capital contribution in kind or a corporation receiving a distribution in kind as a result of a qualified company split, a qualified capital contribution in kind or a qualified in-kind distribution (in the case of a qualified in-kind distribution, excluding a distribution of all of the residual assets; hereinafter referred to as a "qualified company split, etc." in this paragraph), the amount equivalent to the foreign exchange conversion difference pertaining to the assets, etc. in a foreign currency that would be calculated pursuant to the provisions of the preceding paragraph if the day preceding the date of the qualified company split, etc. were the last day of a business year is included in gross profits or deductible expenses, when calculating the amount of income for the business year containing the date of the qualified company split, etc.

④The conversion of the amount of assets, etc. in a foreign currency into the amount in Japanese yen in the case where the foreign exchange rates fluctuate significantly, procedures for selecting a method to be used to convert the amount of assets, etc. in a foreign currency into the amount in Japanese yen, disposition of the foreign exchange conversion difference prescribed in paragraph (2) 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.