 Let's discuss a forward contract and how the accounting entries are going to be recorded. It's a simple question but technically we are not supposed to record any entry in practice but for the accounting purposes if we are entering into a contract so we must record somewhere normally sometime we record a memorandum entry just recording that we enter into a contract and this and this that's all but still accounting entry can be recorded number one let's see A B enter into a forward contract A is ready to sell an asset for 12,000 on 1st January 21 and B agreed to buy it on 31st March 21 3 months later B agrees A agrees that I will give you this for 12,000 and no matter the price but you have paid 31,000 for this and you have paid 31,000 and the price is fixed. The spot price of asset is 10,000. If you buy today you get 10,000 in cash but you have to sell it for 12,000. Seller will record on 1st January this is a basic accounting entry and later on it reverses. Receivables debit because you have to sell an asset so whenever we sell something we debit the receivables. In this case sales asset is not there and the asset is to be sold but that too is not sold. The exchange is not happening so you simply debit the contract receivable and credit the asset obligation. The asset obligation in the sense that you ultimately have to give the receivable against assets but the interesting thing is that the asset value today is 10,000, the spot rate is 10,000. So the differential you have to credit in the premium of 2000. In January, in the beginning whatever you will contact you have to put this entry but on 31st March we will reverse it. As it is reversed, reversal entry means that you have put an adjustment at the end of the year and you reverse it in the beginning of the year. So we also put reversal entry in accounting. Now settlement on maturity. Now you have to give it an asset and it will give you money. So you will debit cash for 12,000 which is fixed but you have to buy an asset from the market of 11,000. Then you credit the asset from 11,000 and the gain will be credited from 1000. Let me tell you here that if your asset is 13, 14, 15, then you will have to buy it and give it and you will get 12,000. In that case you will lose. So in this case since you have bought 11,000 and sold it in 12,000, then you have a gain of 1000. What will B do? B is going to buy an asset so he will debit the asset because he has to buy an asset and he will credit the liability and he will credit the contractable and the differential again same. The differential is going to debit the premium. So the reverse is there, we had debit the receivable and we have debit the asset. If we have done the receivable debit from 12,000, then we have credit the payable from 12,000 to 12,000. So the entry will be correct. Now on 31st March, this entry will be reversed which B has done. Exactly similar item, same contract payable, debit, at just receivable the credit and premium credit 2000. Now see this is the first and second entry net off. Now he is buying an asset. So how many assets do you have? 11,000. You have to give 12,000. So basically you are getting a loss of 1,000. So you have debit the asset and debit the loss and credit the cash. So this is total of 12,000. So in forward contract, generally we don't do anti-record because it is over the counter. Two parties agree and they deal with it at the end of the day. They balance out. But if you have to do accounting, then this is the way you book them and take them to the record and finally settle. One more thing, I will tell you that normally there is no asset exchange in this. They balance each other. If I have a loss, they give it to me, if I have a profit, they give it to me. Then they go forward like this. But if they want to take the asset, then it can be an entry. So this is how in the forward contract, general entries or accounting entries are made. In this way, we conclude it. So it is simple. It is not a difficult thing. How to record an entry? Generally, it is called contingent. Contingent means occurring on something. If there is something to happen in the future, then we should watch out from now on and bring it to the record. So this is how basically these contingencies are taken care in accounting also. So in this forward contract, you have seen that we are selling something, somebody is buying something. So the seller is recording, the receiver, buyer is recording, they are payable. And similarly, the asset in between is also being recorded. Thank you very much.