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These provisions apply in broadly the same way as discussed above in the case of a currency contract that is used to hedge a firm commitment or a forecast transaction. A commodity contract is defined as a derivative contract whose underlying subject matter is commodities unless the underlying subject matter of the derivative contract also includes interest rates, in which case the contract will fall within the Disregard Regulations reg 9 (see D1.861 below)¹. A debt contract is a derivative contract whose underlying subject matter is an asset or a liability representing a loan relationship unless the underlying subject matter of that contract also includes interest rates. Where the underlying subject matter of a debt contract also includes interest rates the contract will be dealt with under reg 9².

Where this particular provision applies, the profits or losses arising in respect of the commodity contract or debt contract, as recognised in a company's accounts in accordance with generally accepted accounting practice, are ignored in computing its