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COMMODITIES HELD BY BROKER

9 Months Ended

Jul. 31, 2021

Brokers and Dealers [Abstract]

COMMODITIES HELD BY BROKER

NOTE 4 - COMMODITIES HELD BY BROKER:

The Company has used, and intends to continue to use in a limited capacity, short term coffee futures and options contracts primarily for the purpose of partially hedging and minimizing the effects of changing green coffee prices and to reduce our cost of sales. The commodities held at broker represent the market value of the Company’s trading account, which consists of options and future contracts for coffee held with a brokerage firm. The Company uses options and futures contracts, which are not designated or qualifying as hedging instruments, to partially hedge the effects of fluctuations in the price of green coffee beans. Options and futures contracts are recognized at fair value in the condensed consolidated financial statements with current recognition of gains and losses on such positions. The Company’s accounting for options and futures contracts may impact earnings volatility in any particular period.

The Company has open position contracts held by the broker, which are summarized as follows:

SCHEDULE OF CONTRACTS HELD BY BROKER 

		July 31, 2021				October 31, 2020
Option Contracts		$	(191,637	)		$	(164,475	)
Future Contracts			54,881				(287,850	)
Total Commodities		$	(136,756	)		$	(452,325	)

The Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses are included in the statement of operations as a component of cost of sales and not reflected as a net amount as a separate component of stockholders’ equity.

The Company recorded realized and unrealized gains and losses, on these contracts as follows:

SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS 

		2021				2020
		Three Months Ended July 31,
		2021				2020
Gross realized gains		$	288,785			$	150,972
Gross realized losses			(29,077)				(525,155	)
Unrealized (loss) gain			(243,838)				674,015
Total		$	15,870			$	299,832

		2021				2020
		Nine Months Ended July 31,
		2021				2020
Gross realized gains		$	791,897			$	992,875
Gross realized losses			(29,152	)			(1,320,080	)
Unrealized gain			315,569				355,079
Total		$	1,078,314			$	27,874

COFFEE HOLDING CO., INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2021

(UNAUDITED)

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- References

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- Definition

The entire disclosure for financial services, specifically for brokers and dealers, for the accounting period and at the balance sheet date. Disclosure may include amounts receivable from and payable to broker-dealers and clearing organizations, including securities failed to receive, deposits received for securities loaned, amounts payable to clearing organizations related to open transactions, floor brokerage payables and payables for commodities futures accounts liquidating to an equity balance on a broker-dealer's records. May also include disclosure on company's consolidation policy and a note indicating the amount of the broker-dealer's actual net capital and the amount of required net capital.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
-URI http://asc.fasb.org/topic&trid=2176223

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