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What is the notional amount

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Question - On December 16, 2020, Gumamela Conrading sold flowers to a foreign firm. Payment of 1,000,000 foreign currency (FC) is due on February 14, 2021. Concurrently, Gumamela Conrading paid P4,000 cash to acquire a 60-day put option for 1,000,000 FC. Conrading follows calendar basis of reporting.

 

12/16/20

12/31/20

2/14/21

Spot rate (market price)

P0.16

P0.15

P0.147

Strike price (exercise price)

P0.16

P0.16

P0.16

Fair value of call option

P4,000

P13,300

P13,000

What is the notional amount?

The foreign exchange gain or loss on option contract (hedging instrument) due to change in intrinsic value on December 31, 2020 if changes in the time value will be excluded from the assessment of hedge effectiveness should be?

The December 31, 2020, net foreign exchange gain or loss amounted to?

Reference no: EM132917338

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