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Derivative

This topic has 1 reply, 2 voices, and was last updated 5 years ago by P2-D2.

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February 24, 2019 at 10:34 am #506379
Ema
Member
- Topics: 73
- Replies: 107
Sir,
Could you please explain the meaning of this line as I am unable to get a clear picture of this.
The contract was not entered into for the purpose of receipt or delivery of the item to meet the entity’s operating requirements.
Thanks in advance
February 25, 2019 at 10:05 pm #506526
P2-D2
Keymaster
- Topics: 4
- Replies: 7079
Hi,
A derivative is usually used or speculative trading purposes, so if we buy it as part of our ordinary operations then we are not speculating and so it is not a derivative and is treated as a normal financial instrument.
Thanks
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