①With regard to securities held by a domestic corporation as of the end of a business year, the amounts prescribed in the following items, in accordance with the category of the securities listed as follows, are to be their fair value at that time:

②In the case where a domestic corporation holds securities for Buying and Selling as of the end of a business year, the valuation gain therefrom (meaning, in the case where the fair value of the securities for Buying and Selling exceeds their book value at that time (hereinafter referred to as the "book value at the end of the period" in this paragraph), the amount of the excess; the same applies in the following paragraph) or a valuation loss therefrom (meaning, in the case where the book value at the end of the period of the securities for Buying and Selling exceeds their fair value, the amount of the excess; the same applies in the following paragraph) is included in gross profits or deductible expenses, when calculating the amount of income for the business year, notwithstanding the provisions of Article 25, paragraph (1) (Exclusion of Asset Valuation Gains from Gross Profits) or Article 33, paragraph (1) (Exclusion of Valuation Loss on Assets from Deductible Expenses).

③In the case where a domestic corporation transfers securities for Buying and Selling to a succeeding corporation in a company split, corporation receiving a capital contribution in kind or corporation receiving a distribution in kind as a result of a qualified company split, qualified capital contribution in kind or qualified in-kind distribution (for a qualified in-kind distribution, excluding a distribution of all residual assets; hereinafter referred to as a "qualified company split, etc." in this paragraph), the amount equivalent to the valuation gain or valuation loss on the securities for Buying and Selling that would be calculated under the provisions of the preceding paragraph if the day preceding the date of the qualified company split, etc. were the last day of the 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., notwithstanding the provisions of Article 25, paragraph (1) or Article 33, paragraph (1).

④Disposition of valuation gain or loss 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.

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.

②In the case where a domestic corporation transfers a contract pertaining to short selling, etc. (meaning Short Selling of Securities, margin transactions, when issued transactions and the underwriting of securities; hereinafter the same applies in this paragraph) to a succeeding corporation in a company split or a corporation receiving a capital contribution in kind 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), the amount equivalent to the deemed settlement profit or loss pertaining to the short selling, etc. 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.

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.

①In the case where a domestic corporation has conducted derivative transactions (meaning transactions promising the payment or receipt of the amount of monies calculated based on the difference between the numeric value, which has been agreed upon between the parties in advance as the interest rate, price of currency, price of goods or numeric value of another index, and the actual numeric value of such index at a certain time in the future, or transactions similar thereto, which are specified by Ministry of Finance Order; hereinafter the same applies in this Article), when any of those transactions have not been settled as of the end of a business year (excluding transactions based on a foreign exchange futures contract, etc. as prescribed in Article 61-8, paragraph (2) (Conversion of Transactions in a Foreign Currency with the Amount in Japanese Yen Determined under a Foreign Exchange Futures Contract, etc.) in the case where the provisions of the paragraph apply and other transactions specified by Ministry of Finance Order (referred to as "forward exchange transactions, etc." in the following paragraph); hereinafter referred to as "unsettled derivative transactions" in this paragraph), the amount equivalent to the profit or loss calculated, as specified by Ministry of Finance Order, by deeming that the unsettled derivative transactions were settled at the 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.

②In the case where a domestic corporation transfers a contract pertaining to derivative transactions (excluding forward exchange transactions, etc.) 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 deemed settlement profit or loss pertaining to the derivative transactions 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.

③In the case where a domestic corporation has acquired assets other than monies based on a contract for derivative transactions (excluding the case where the domestic corporation has acquired the assets based on a contract for derivative transactions subject to the provisions of paragraph (1) of the following Article), the difference between the value of the assets as of the time of the acquisition and the amount that the domestic corporation paid as the consideration for the acquisition of the assets based on a contract for derivative transactions 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.