[kirsty3008]

Thank you for your response, I am still confused.

This is the question
01 Oct 05, company enters into futures contract to sell 10,000 units of inventory for £5m, no consideration paid. By reporting date of 31 Dec 05 , futures contract risen to £1.1m and FV of inventory had fallen by £0.9m.

There is no entry on the SOFP for derivatives yet.

So do I create a derivative entry and do the following :

DR Derivative 1.1m
CR P&L. 1.1m
DR P&L 0.9m
CR Inventory 0.9m

What do I do with the 0.2m diff to make sure the SOFP balances ?

Thank you
Kirsty

[kirsty3008]

Did you find the answer to this, I am stuck on it too.
Is it the $15m financial asset?

[kirsty3008]

Thank you – this has really helped 🙂

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