where formula_1 is the (current) value of a call, formula_2 is the (current) value of a put, formula_3 is the discount factor, formula_4 is the forward price of the asset, and formula_5 is the strike price. Note that the spot price is given by formula_6 (spot price is present value, forward price is future value, discount factor relates these). The left side corresponds to a portfolio of long a call and short a put, while the right side corresponds to a forward contract. The assets formula_1 and formula_2 on the left side are given in current values, while the assets formula_4 and formula_5 are given in future values (forward price of asset, and strike price paid at expiry), which the discount factor formula_3 converts to present values.