(1) "Unrealized profits prescribed by Presidential Decree" in Article 462(1)4 of the Act means the net assets on the balance sheet, which have increased as a result of valuation of assets and liabilities according to the accounting principles under Article 446-2 of the Act but have not been offset against unrealized losses. <Amended on Feb. 24, 2014>
(2) In either of the following cases, unrealized profits may be offset against unrealized losses, notwithstanding paragraph (1): <Added on Feb. 24, 2014; Dec. 19, 2023>
1. Where unrealized profits and unrealized losses have been incurred as a result of a transaction of derivative-linked securities under Article 4(2)5 of the Financial Investment Services and Capital Markets Act and subsequent transactions linked to the former transaction for hedging risks of the transaction;
2. Where unrealized profits and unrealized losses have been incurred as a result of a transaction of derivatives under Article 5 of the Financial Investment Services and Capital Markets Act and subsequent transactions linked to the former transaction for hedging risks of the transaction.
3. Where unrealized profits and unrealized losses have been incurred as a result of any of the followings transactions of an insurance product under subparagraph 1 of Article 2 of the Insurance Business Act and subsequent transactions linked to the former transactions:a. Debt securities under Article 4(3) of the Financial Investment Services and Capital Markets Act or derivatives under Article 5 of the same Act for hedging risks of interest rate fluctuations on liabilities related to insurance contracts;b. Transactions of reinsurance under Article 661 of the Commercial Act to transfer risks related to insurance contracts;c. Transactions arising from insurance contracts under Article 108(1)2 of the Insurance Business Act, in which the insurance proceeds fluctuate according to the performance of asset management, or variable insurance contracts under subparagraph 3 of the same paragraph.