Description
Accountancy, or accounting, is the production of financial records about an organization
ACCOUNTING FOR DERIVATIES
DERIVATIVE-
A Derivative is a financial contract whose value is a “derived form” or depends on, the price of some underlying asset.
ACCOUNTING FOR DERIVATIVESOn June 15,1998 the financial accounting standards boards (FASB) issued financial acc standard no.133 has applied to all forms that use derivatives for hedging since the accounting period beginning from June 15,2000. Firms were permitted to adopt the new rule as early as July,1998.
FAS 133 establishes three new classification of hedges each with its own accounting treatment-
1. Fair value hedges 2. Cash flow hedges 3. Foreign currency hedges
FAIR VALUE HEDGESIt exists when the derivatives are used to hedge the risk resulting from changes in
doc_988004927.pptx
Accountancy, or accounting, is the production of financial records about an organization
ACCOUNTING FOR DERIVATIES
DERIVATIVE-
A Derivative is a financial contract whose value is a “derived form” or depends on, the price of some underlying asset.
ACCOUNTING FOR DERIVATIVESOn June 15,1998 the financial accounting standards boards (FASB) issued financial acc standard no.133 has applied to all forms that use derivatives for hedging since the accounting period beginning from June 15,2000. Firms were permitted to adopt the new rule as early as July,1998.
FAS 133 establishes three new classification of hedges each with its own accounting treatment-
1. Fair value hedges 2. Cash flow hedges 3. Foreign currency hedges
FAIR VALUE HEDGESIt exists when the derivatives are used to hedge the risk resulting from changes in
doc_988004927.pptx