What amount of forward loss should parker company recognize

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On January 2, 2020, Parker Company enters into a forward contract to purchase on January 2, 2022, a specified number of barrels of oil at a fixed price. Parker Company does not pay anything to enter into the forward contract on January 2, 2020. Parker 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: What amount of forward loss should Parker Company recognize at the end of year 2021?

Group of answer choices

a. P400,000

b. P350,000

c. None

d. P50,000

Reference no: EM132793149

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