currency option

A/c entries 819 views 1 replies

Can anyone pl guide me regarding accounting treatment/entries of currency option trading ?

Replies (1)

Hi Parthas

 

Currency options are no different from regular Stock Option / Index Option. Only difference, the underlying is a Currency rather than index / stock / commodity.

 

Accounting should be as follows -

1. Premium paid should be shown as an Asset till expiry / exercise.

2. Upon expiry / exercise, it should be transferred to Profit and Loss Account.

3. As at Balance Sheet date, Options not yet settled should be disclosed on the Balancce Sheet side, after duly creating a provision for any loss based on Balance Sheet date values of Premium for the same Option Contract.

 

Rineesh R


CCI Pro

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