Accounting of options agreements wit- hin the framework of tfrs 9 hedge accoun- ting provisions

An option is basically defined as a contract\rthat gives the investor the right to buy or sell\rthe underlying asset in a certain term. The issue\rof how the fair value of these contracts and the\rchanges in value during the period will be deter-mined and how they should be reflected in the\rfinancial statements is important. The purpose\rof this study is to examine the principles of how\rto account and report option contracts within\rthe scope of hedge accounting specifiedin TFRS\r9 Financial Instruments Standard. As a matter of\rfact, the fair value of the option contract is evalu-\rated continuously during the maturity period, and\rthe final gain or loss becomes definite as of the\rmaturity date. In this respect, it is an important\rrequirement for users of financial instruments to\rtransfer gains or losses related to option contracts\rto financial statements in a way that does not im-\rpair their accuracy and reliability in the context of\rfairness criteria, as required by the approach of\raccounting standards. In the study, the issues re-\rlated to option contracts were evaluated in gene-\rral, and then, how the option contracts acquired\rfor hedging the fair value change risk and cash\rflow variability risk should be accounted within\rthe framework of the hedge accounting princip-\rles specified in the TFRS 9 Financial Instruments\rStandard, are explained through fictionalized\rsample applications.