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Investment in Commodities Futures: The Accounting Implications
Author(s) -
BARYOSEF SASSON,
LIVNAT JOSHUA
Publication year - 1984
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.1984.tb00192.x
Subject(s) - futures contract , accounting , audit , business , investment (military) , accounting standard , hedge accounting , accounting information system , mark to market accounting , economics , financial accounting , finance , political science , politics , law
There are no rules within existing Generally Accepted Accounting Principles that apply to investment in commodities futures. In this paper, the accounting implications of investing in futures are explored. The accounting problems relate to the first record of the contract and to the subsequent recognition of gains and losses. There is no unequivocal answer under GAAP as to how futures contracts should be recorded. As with many other items in conventional accounting practice, the method of recording depends upon managers’intentions. This has obvious, and serious, implications for auditors.