Certain derivatives are excluded from the inventory valuation rules while maintaining the status of such property as inventory resulting a current write-down of the value and recognize the gains at the end of the year.
Section 10 of the Income Tax Act is amended by adding the following after subsection (14):
(15) For the purposes of this section, property of a taxpayer that is a swap agreement, a forward purchase or sale agreement, a forward rate agreement, a futures agreement, an option agreement, or any similar agreement is deemed not to be inventory of the taxpayer."
For more information, please contact us @ 604-639-3229 or firstname.lastname@example.org
Note: All information relating to derivatives valuation above is available from Government of Canada website.
By Theresa Lo, CPA, CGA
October 11, 2017
Call us at +1 604 639-3229+1 604 639-3229 with any questions or to schedule an appointment.
Or you may use our contact form.
Theresa Lo, CPA
Suite 206, 5050 Kingsway
Burnaby, British Columbia