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Topic: 2009 AICPA Newly Released Questions - 36 (

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utesa
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Joined: 28 Aug 2008
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Posted: 24 May 2009 at 13:49 \| IP Logged

	shares	cost		fmv	total
12/1/2000	2,000.00	40.00	80,000.00	600.00	80,600.00
12/31/2000	2,000.00	43.00	86,000.00	400.00	86,400.00
			(6,000.00)	200.00	(5,800.00)
			Gain	Loss
Becker: F7- pag.5 (B) gains and losses on derivatives instruments not designated as a hedging instrument are recognized in current earning NI. This is a derivative inst. Per definition in F7 page 4. (options contracts). Question did not mention hedging purposes therefore book in Current earnings. please correct me if I am wrong in razoning.

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persist
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Posted: 24 May 2009 at 13:56 \| IP Logged

Thanks Utesa.

I think you are right! I did not find anything related to time value of option so was not sure of the treatment!!

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