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Option Accounting Entries

13 June 2009 3,106 views 2 Comments

Dear All

Our Company is into Oil trade and has entered into options in commodity.

Can some one give me the list of accounting entries under USGAAP in the books of both Options writer and options buyer.

Request you to give the journal entries under both these circumstances
1. If the company follows hedge accounting
2. If the company doest follow hedge accounting

Also let me know the relavant accounting standard.

Thanks for your help.

Regards

Ganesh

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2 Comments »

  • riyer said:

    Dear Ganesh,

    Under FAS 133 & IAS 39, commodity derivatives (provided your company does not have precedence of not taking delivery on a routine basis) are scoped out. Consequently, one need not fair value such derivatives. Such derivatives will be treated in a manner similar to the way executory contracts are dealt with.

    Regards,

    Rama

    # 1 August 2009 at 7:38 am
  • imraanaly said:

    i want to know about how the mtm for call option will be done if these options are

    1. naked call options
    2. back to back with customer deals

    imran

    # 21 February 2011 at 4:26 pm

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