Profit and Loss A/c for FnO trader

One can present them as losses and gains separately in income statement.

Then, you can set off gains from losses and carry forward losses to file ITR.

I’m not sure about Form 3CD

Thanks for your reply.

Should the gains be shown as sales of services or as Other income. Losses should we show as purchases or other direct income?

Also if someone could reply on 3CD turnover. Further what notes to accounts should come in the audited financials of FnO trader as per ICDS.

That depends upon the nature of business. Go through principal agent relationship in revenue recognition standard. If you fall under that, commission accounting is required. His is for IndAS accounting. https://www.mca.gov.in/Ministry/pdf/Ind_AS18.pdf. Here losses and gains are separately identified and presented from Revenue.

If your following AS9, you cannot recognise the gain as revenue

and principal agent relationship exists in this standard. https://www.mca.gov.in/Ministry/notification/pdf/AS_9.pdf

Now there is another way to find out about the treatment of loss, check b.com, MBA  textbooks like I did just now and you’ll be surprised that there is no treatment for losses on instruments in trading & P&L account apart from bad debts written off. However, AS 9 treats revenue separately and losses separately in the income statement and debits all losses and credits all gains. I’m sorry, I meant agency relationship exists in as9 as well. 

This should make everyone realise that IndAS is sophisticated than AS and should be made redundant in India. Because CA has to study both of them and one is (AS) waste of time.

My query is:

Should the gains be shown as sales of services or as Other income.

Losses should we show as purchases or other direct income? Also if someone could reply on 3CD turnover. Further what notes to accounts should come in the audited financials of FnO trader as per ICDS.

Gain= Gain from trade/gain from disposal

Loss= loss on ___ ___/loss on trade/ loss on disposal