If the hedging is very effective, the liquidation loss and surplus should be included in the inventory value. If it does not take effect, it will be recorded in the current loss and overflow.

The specific items are as follows:

According to the Interpretation of Accounting Standards (edited by Accounting Department of Ministry of Finance, People's Publishing House, 2008) and Chapter 25: Hedging, the financial accounting of AAAA Company should be treated as follows:

At the beginning of next month, according to the statements of the futures exchange last month, the floating gains and losses on the statements will be included in the changes in owners' equity.

If it is a floating surplus, then:

Borrow: hedging instrument-futures instrument XXXX yuan.

Loan: capital reserve-other capital reserve (change in the value of hedging instruments) XXXX yuan.

If it is a floating loss, then:

Debit: capital reserve-other capital reserve (change in the value of hedging instruments) XXXX yuan.

Loan: hedging instrument-futures instrument XXXX yuan.

(2) After the actual transaction, that is, after the liquidation, the losses and surplus results caused by the liquidation of futures are included in the purchase value of electrolytic copper in the same period or similar stage of the month.

Transfer out of liquidation losses and excess included in capital reserve:

Debit (loan): capital reserve-other capital reserve (change in the value of hedging instruments) XXXX yuan.

Loan (debit): The hedging loss is RMB XXXX.

The results of hedging loss and surplus are included in the purchase value of electrolytic copper in the current month or similar month:

Borrowing (lending): raw materials-electrolytic copper yuan.

Loan (debit): The hedging loss is RMB XXXX.

③ After the inventory value is included, the value accounting and carry-over of semi-finished products, finished products and sales costs are carried out according to the general manufacturing cost accounting process.