CRA treats hedging book of Canadian parent in respect of subsidiary's business as being held on income account

A Canadian parent assumed the commodities hedging book of a foreign subsidiary and then realized gains and losses on closing out that hedging book over a number of years.  CRA found that as this assumed hedge book was not linked to an underlying capital transaction of the parent, those gains and losses were on income account (as reported by the Canadian parent).

Neal Armstrong.  Summary of 10 July 2012 Memorandum 2011-0418541I7 under s. 9 - Commodities, and commodities futures and derivatives.