Accounting entry of future/option purchase /sale

A/c entries 2070 views 1 replies

Dear Sir/Madam

I am working professional. Few days back I have come across a problem regarding accounting treatment of Futures/Option Purchase/sale. 

1. What will be the accounting entry for purchase of future/option.

2. What happens when above entry squared off on there expiry date or squared off by trader before there expiry.

3. What entry to be made for Profit/loss of above transaction.

4. What to do at the time of finalisation of books, when I have some open position in above transactions.

5. what will be the effect of open interest in Balance Sheet.

Need your cordial co-opration.

Thanking you.

Rahul Goyal

CFA

Replies (1)
Originally posted by : Rahul goyal

Dear Sir/Madam

I am working professional. Few days back I have come across a problem regarding accounting treatment of Futures/Option Purchase/sale. 

1. What will be the accounting entry for purchase of future/option.

2. What happens when above entry squared off on there expiry date or squared off by trader before there expiry.

3. What entry to be made for Profit/loss of above transaction.

4. What to do at the time of finalisation of books, when I have some open position in above transactions.

5. what will be the effect of open interest in Balance Sheet.

Need your cordial co-opration.

Thanking you.

Rahul Goyal

CFA


If I am not wrong purchasing futures contract will be seen as a form of investment. So,

Investment a/c Dr

          To Bank a/c Cr

 

And when squaring of,

Bank a/c Dr

        To Investment a/c Cr

I think there will not be any changes in P/L but only balance sheet will reflect changes.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 14 March 2026
Associate CA

N N V Satish&co

Hyderabad

CA

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 14 March 2026
Article Trainee

N N V Satish&co

Hyderabad

CA Inter

View Details