Wildlife Sanctuary Ltd (WSL) at the beginning of 2021 were optimistic about the Australian market due to the successful containment of Covid -19 outbreak in the country in 2020. On 1 February 2021. WSL decides to take out a BUY position in 50 SPI Futures units when the All Ordinaries SPI is 4800. To enter the contract, WSL makes an initial deposit of $10 000 with the futures broker. The unit price of the future contracts is $10. It is considered that movements in the SPI Futures will reflect changes in the value of the diversified share portfolio held by WSL. However, a new variant of the Covid 19 virus emerged in Australia in June 2021 and since then many states in Australia have been forced into lockdown. On 1 October 2021, the SPI has fallen to 3500. WSL decided to close the futures contract.

Required a. Apply relevant principles in AASB 9 to assess if the SPI future contract is a derivative financial instrument. (5 Marks) b. Calculate the total gain or loss as a result of this contract and provide the accounting entries for WSL (no need for narration). Show your workings. (6 Marks) c. Would your answer to Part b be different if WSL takes a Sell position? Explain. (4 Marks)