Investment in Commodities Futures: The Accounting Implications

SASSON BAR‐YOSEF*, JOSHUA LIVNAT

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

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.

Original languageEnglish
Pages (from-to)87-95
Number of pages9
JournalAbacus
Volume20
Issue number1
DOIs
StatePublished - Jun 1984

Keywords

  • Commodity futures
  • Financial reporting

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