Soron Limited is a private company that uses derivatives to mitigate a variety of risks. The ethical accountant, Leon Price, has just been hired as the new controller and has recently met with the CEO. The CEO has just explained to him the following derivatives that the company is currently party to. The CEO has further explained that he would like to avoid showing the losses on the financial statements. Assume any requirements for hedge accounting are met.

The company recently purchased 10,000 shares in a company. These shares are publicly traded. At the same time, the company purchased exchange-traded options to sell these shares at a future date.

The company recently sold goods to a customer in the United States and the invoice was priced in U.S. dollars, which should be collected in six months. At the same time, to mitigate the loss on the exchange value of this receivable, Soron entered into a forward contract to sell the same amount of U.S. dollars in six months.

Discuss how these derivatives should be accounted for.