Presentation of option liability in reports

Hi,

I have been recording option trading transactions using method 3 (position as the seller of Call Options) provided in the link below:

At year end, when the seller has open position for the Call Options, it is shown as a negative
investment asset in the Statement of Financial Position.

Am wondering if there is a way to present the open position of Call Options as a Liability in the Statement of Financial Position instead of showing it as a negative amount in asset?

Was there any response to this question? I had a similar issue and created a new balance sheet liability account called “Call Options Obligation Account”. If you want further details please let me know.

Hi Dean,

Yes please, would appreciate if you could also share how you recorded the journal entries for this.

Thanks a lot!

Hi Joan

Attached is the journal entry (SF360 – Transaction List.pdf) and the associated worksheet (ABC open_position_300620.xlsx).

It is important to note that in SF360 I book all Call Options for the year as realised CGT income at the date they are written because this gives the correct tax position.

While the above Jnl. takes up an asset (Call Option Positions) of $41,050, I then go to the Investment tab/Investment Securities List and value each open Option as at 30/6/2020 at $0.00 so that when SF360 does the market value adjustment on Create Entries the balance sheet value of the open option positions is reduced to Nil and the $41,050 debit is taken to the P&L as an “Unrealised loss on Option Positions”. This leaves, on the B/S, a liability for the open options “Call Option Obligation Account $41,050”.

To help better understand the overall effect of the above, I have prepared a worksheet called “Summary of entries re Open Call Options at 30 June 2020” – see pdf attached.

Hope this helps.

Dean

(Attachment SF360 - Transaction List.pdf is missing)

(Attachment ABC open_position_300620.xlsx is missing)

(Attachment Summary Open Options 30-6-20.pdf is missing)

Hi Joan

I found out that you can’t attach .pdf’s or .xlsx files. So I have now attached .jpg files.

Hope this works

Dean Ward

image001.jpg

Hi Dean,

Really appreciate your help. Thanks for sharing!