Turnover Accounting and Futures Trading

[donaldduke]

When you do your ltd company accounts you normally mention the companies turnover.

Now lets say i buy one ER2 futures contract at 800 and sell it at 810 and thats all the company does.

My profit is easy to calculate $1000 for the year.

But what is the companies 'turnover'?

Is it 80,000 the amount of stock one contract is equivalent too, in which case my turnover will run into hundreds of millions for a real year of trading.. or is it the difference between all my buy and sells added together?

I asked my accountant, who didnt know the exact answer off hand, but he said he would find out.. does anyone know?

 

[Rainmaker777]

Does anyone know the answer to this question yet?

 

[grantx]

Don,

I would guess the turnover is the sum of your buys and sales. If this a normal part of your company's operations (specifically hedging), then presumably any gain (or loss) would be treated as an 'exceptional item' . But I've no idea how that would translate to the bottom line.

However, as this is 'speculation' I doubt the Inland Revenue would recognise your company as a bona fide brokerage operation unless it was authorised/registered with the FSA. Therefore, all gains would be taxed on a capital gains basis and there would no allowable expenses with which to offset any gains.

Grant.