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Determination of Whether Combinations of Options with the Same Terms Must Be Viewed as Separate Option Contracts or as a Single

By Hedging Activities and Forward Contract


1. An entity may sell inventory to another entity from which it also purchases inventory to be sold in the same line of business. The inventory purchase and sales transactions may be pursuant to a single arrangement or separate arrangements, and the inventory purchased or sold may be in the form of raw materials, work-in-process (WIP), or finished goods. 2. The issues are: Issue 1—The circumstances under which two or more inventory purchase and sales transactions with the same counterparty should be viewed as a single exchange transaction within the scope of Opinion 29 Copyright © 2007, Financial Accounting Standards Board Not for redistribution Page 1Issue 2—Whether there are circumstances under which nonmonetary exchanges of inventory within the same line of business should be recognized at fair value. 3. The scope of this Issue excludes inventory purchase and sales arrangements that (a) are accounted for as derivatives under Statement 133 or (b) involve exchanges o

Year: 2005
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