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What amount of forward loss peter senen company recognize

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On January 2, 2020, Peter Senen Company enters into a forward contract to purchase on January 2, 2022, a specified number of barrels of oil at a fixed price. Peter Senen Company does not pay anything to enter into the forward contract on January 2, 2020. Peter Senen Company does not designate the forward contract as a hedging instrument. At the end of 2020, the fair value of the forward contract has increased to P400,000 and at the end of 2021 its fair value has declined to P350,000.

Problem 1: Assuming Peter Senen Company is speculating that the price of oil will increase and plans to net settle the contract if the price increases, what amount of forward loss should Peter Senen Company recognize at December 31, 2021 statement of comprehensive income

a. P400,000

b. P350,000

c. P50,000

d. None

Reference no: EM132769156

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