 We are talking about future and forward and let's have a complete picture of this, we call it derivatives. In September 2020, ABC Company anticipates purchasing 1,000 metric tons of sugar in January 2021. Any three months you have purchased 1,000 metric tons of sugar, ABC Company. Concerned that the price of sugar will increase in the next few months, ABC Company wants to hedge the risk that might pay higher price for the inventory in January 2021. As a result, enter into future contracts call option. Now a future contract gives the holder the right and the obligation to purchase an asset at present price for a specified period of time. In this case, the future contracts gives the right and obligation to ABC Company to purchase 1,000 metric tons of sugar for 4,000 per ton. The contract price in goods until contract expire is January 2021. The underlying for this derivative is the price of sugar. If the price of sugar rises about 4,000 per metric ton, the value of the future contract over B Company increases. The why? Because ABC will be able to buy sugar at a price of Rs.4,000 per metric ton, if it increases, you will get a profit of 4,000 per metric ton, if it increases from 4,000, you will get 4,000 per metric ton. Enter into the future contract on 1st September 2020, assuming that the price of sugar to be paid today for inventory to be delivered in January, the spot price is equal to the contract price. The spot price is equal to contract price with the two price equal, the future contract has no value. Therefore, no entry is necessary. At 31st December, the price for the January delivery of sugar increases to 4,500. The ABC will make the following entry, future contracts debit and unrealise holding gain or loss credit. The figure is that the difference between 4,500 and 4,000, you multiply 1,000 metric tons, you get 5,000,000, you get a holding gain. ABC will report the future contract in statement of financial position at 31st December 2020 as a current asset, it reports the unrealised gain or loss and future contract as a part of other comprehensive income. Note that this is not your profit yet, if it is, then we can show it in the income statement. But since this is not a profit yet, therefore you cannot show it in the income statement. We put this in other comprehensive income, it becomes the part of equity. Now, at 21st December, the metric tons, sugar 4,500 and make the entry, the inventory will be debit from 4,500, cash will be credit from 4,500, at the same time, ABC make a final entry of cash, debit, reverse, but you have bought it from 4,000, but you did not have to buy it, you have bought it from 4,500, so the extra pay you have paid will be returned to you. You can do the net entry, but since you have debited the future contract, you have to cancel it. How will you cancel it? You will debit the cash and credit the future contract, or you can put an entry, it is called compound entry, you can also debit the inventory from 4,500, and credit the cash that you actually have to give, credit the 4 million, and credit the future contract that you have debited. Now, in the net shell, the gain will be your gain, because you have bought it from 4,500, you have bought it from 4,000, so your gain is ultimately in your income statement. In income statement, it does not go directly, it basically routes with retained earning, because it will not be as it is in the balance sheet, in fact, it will go into your retained earning. Ultimately, it should not be the current year problem, but it will come into your retained earning. So, this is how basically, in the future contracts, the gain and losses, somewhere you get this income statement, somewhere you get this income in OCI, OCI means other comprehensive income. So, we credit it in that. So, it is simple, it is not so difficult as such, that in the future, but again, I will repeat this, that we have to be very, very careful while dealing with this, because it is also possible that the price will be reduced due to the lack of sugar, it is not the point of view of Pakistan, but still, if it is done, then you may have lost. Thank you very much.