The Content and Comment About Hedging Accounting of IFRS9
Date Issued
2016
Date
2016
Author(s)
Liu, Bing-Qing
Abstract
As the progress of financial liberalization and innovation, hedge activities come to boom with the appearance of derivative financial instruments in the financial market and enterprises'' increasing demand of them. As a result. IASB and FASB issued IAS 39 and FAS 133 respectively to regulate the accounting treatments of enterprises'' hedge activities. However, some problems start to appear during application of the hedge accounting. Especially after the financial crisis in 2008. Risks in the financial market arouse people''s more attention. People start to attach more importance to the practicability of hedge accounting and its influence on the corporate performance''s vibration after application. Therefore, a large-scale reform of the active international standard IAS 39 starts to come out. As well as the international hedge accounting standards, there are also some problems in CAS 24. For example, the accounting recognition''s criterion of hedge relationships is too harsh and rules-based and the standards application is too complicated. All these problems may impede the development of hedge activities and the hedge accounting standards'' utilization in china to some extent. And also, they influent the effects that enterprises manage risks with hedge tools. The drawbacks lead to the necessity of reform. In the context that CAS is converging with IAS, it is important that we study the international hedge accounting standards'' reform and its impact on accounting theory and practice. Therefore, this essay tends to study the latest news of IASB''s reform of hedge accounting standards and its effects throughout years with standard research. This essay will summarize the same and the difference between IFRS9 and IAS39, comment on the problems that the active hedge accounting standards have, and conclude that the key point of this reform is to simplify the hedge accounting standards treatment and to enhance the applicability. It finds out the problems that the active hedge accounting standards brings during its application in the practice by studying the cases using hedge accounting standards. The development of theory related with hedging is in the frontier by western countries which actively promote the development of hedging theory and revision of hedging standards. In the context of the IASB overhaul IFRS9, it is necessary to actively participate in it. I think that the Amendments of IFRS9 is expected to have impact on relative standard revision, derivatives market, the quality of accountant, risk management and information disclosures of enterprises. So, learning from the experience of revision standards to match our economy environment, which is important to the development and improvement of hedging accounting theory and practice.
Subjects
Hedging Accounting
Hedging
Risk Management
Derivatives
Type
thesis
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