Hi
 
Can anyone respond to my email below?
 
Thanks and regards
 
Catherine

Hi
 
I would need your assistance on how to account for futures/options in the financial statements.
 
Thanking you in advance for your kind assistance.
 
Regards

Catherine


Catherine,

 

Have you looked at IAS39 already, because depending on that you can or cannot apply hedge accounting. Basically you have 2 methods either Cashflow hedging or fair value hedging. If you want to do hedge accounting you will be required to do a lot of prospective and retrospective testing to prove the effectiveness of your hedges. If you don’t do hedge accounting the Fair value result on futures and options will flow directly in to P&L. Hope this helps.

Best regards,

John


 

 

Catherine
You account for futures and options at their fair value with changes in PL unless classified as hedging instruments. Margins for futures and premiums for options are transaction costs recognized in PLtogether with changes on fair value.
Best regards
A. Desssnti