Treatment of Mark to Market Gain in case of Derivatives

552 views 1 replies

An entity buys an option expiring in one year and pays a premium of Rs. 100 for the same. On the next quarterly reporting date of the entity fair value of the option is Rs. 80 and hence the entity books a loss of Rs. 20 immediately. On the second subsequent quarterly reporting date fair value of the option is Rs. 120. Is the entity allowed to:

a) book the entire gain of Rs. 40 (Rs. 120 - Rs. 80) in the financial statements immediately?

b) book gain of Rs. 20 immediately (Rs. 100 - Rs. 80) i.e. the loss which it had booked in the earlier quarter and ignore the remaining gain of Rs. 20 (Rs. 120 - Rs. 100) to be recognised in future periods?

c) ignore the entire gain of Rs. 40 (Rs. 120 - Rs. 80) to be recognised in the future periods?

Replies (1)

Dear Sir,

there is a separate chapter in the CA final. Pls ask for notes of any CA fianl person for that particular chapter

sunil
 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
09 June 2026
Accounts Associate

S Madan and CO

New Delhi

Graduate (Any)

View Details
Company
ARTICLESHIP 28 June 2026
Article Assistant

Sharma Chetan And Company

Gurgaon

CA Inter

View Details
Company
ARTICLESHIP 30 June 2026
Article Assistant or Paid Assistant

VIKAS VERMA & CO

New Delhi

Others

View Details
Company
06 July 2026
C.A./CA Inter OR pursuing C.A./GST/Accounts/Audit/IT - Head

Arvindkumar Maniar & Co.

Rajkot

CA

View Details
Company
25 June 2026
Accounts & Taxation Executive

Dindukurthy & Associates

Hyderabad

MBA

View Details
Company
19 June 2026
Accounts Executive

Getfive Advisors Pvt. Ltd.

Ahmedabad

CA Inter

View Details
Company
20 June 2026
Assistant Accounts Manager

Fintax Professionals

Gurgaon

CA Inter

View Details
Company
24 June 2026
Senior Account (VA Client Operations)

Karbon Business

Bengaluru

CA Inter

View Details