definiens: ) . I. shall mean, with respect to a product for any period for a country, expressed in local currency in such country, the gross amount invoiced for commercial sales of such product in such period by the applicable selling Party or any of its Affiliates to Third Parties ( for clarity, excluding in the case of the Combination Product any amounts of Combination Product supplied to ( or Manufactured by ) the Selling Party and distributed pursuant to Section 6.IO(a ) or ( b ) of the Agreement ) ( ), less charges, if any, to the applicable Third Party for freight, postage, shipping and insurance expenses ( if separately identified in such invoice ) and less deductions for : ( a ) normal and customary quantity or cash discounts and sales returns and allowances, including those granted on account of prompt payment, price adjustments, billing errors, permitted customer rejections or returns, including due to a recall or product withdrawal, for a given quantity of the applicable product, administrative fees or reimbursements or similar payments to wholesalers or other distributors, buying groups, pharmacy benefit management organizations, health care insurance carriers or other institutions ; allowances, rebates, fees paid to distributors and chargebacks allowed or given ; ( b ) customs or excise duties or other duties related to the sales making up the gross invoice amount ( if separately identified in such invoice ) ; ( c ) any rebates or similar payments accrued with respect to sales paid for by any governmental or regulatory authority ; ( d ) sales and other taxes and duties directly related to the sale, to the extent that such items are included in the gross invoice amount ( but not including taxes assessed against the income derived from such sale ) ; and ( e ) any other item taken as a deduction to determine net sales under GAAP . The foregoing shall be calculated in accordance with GAAP ( unless otherwise agreed by the Parties ( or their respective Affiliates ) pursuant to Section 3 of this Annex ) . Any of the deductions listed above that involves a payment by such Party shall not be taken as a deduction prior to the date accrued in accordance with GAAP ; provided, however that returns shall be deducted based on the actual returns rather than on the basis of the GAAP accruals approach . Further, for purposes of determining Net Sales with respect to a product, the product shall be deemed to be sold when the revenue obtained in connection with the transfer of such product to a Third Party is recognized in accordance with GAAP . Net Sales with respect to a product for any period for the Territory as a whole shall be expressed in U.S. Dollars and, in the case of the Territory Combination Product, shall be equal to the sum of Net Sales of the Territory Combination Product ( as converted into U.S. Dollars on a monthly basis using the actual average daily exchange rate for the applicable month for converting the applicable currency into U.S. Dollars, as such rate is reported in Bloomberg Professional < R > service application ) in each country in the Territory for such period