Farley And Partners

Financial Instruments

Covers all aspects of accounting for financial instruments, from the mechanics of amortised cost to embedded derivatives and hedge accounting.

IAS 32: Financial Instruments: Presentation

  • Definitions of financial assets, financial liabilities and equity instruments
  • The debt vs. equity distinction
  • Compound financial instruments

IAS 39: Financial Instruments: Recognition and Measurement

  • Categories of financial instruments, including recognition, classification, reclassification and derecognition
  • Measurement rules for each category
  • Impairment
  • Financial instruments denominated in a foreign currency
  • Derivatives, including examples and accounting treatment
  • Embedded derivatives
  • Hedge accounting, including accounting for a fair value hedge, cash flow hedge and foreign entity hedge

IFRS 7: Financial Instruments: Disclosures

  • Information about the significance of financial instruments
  • Information about the nature and extent of risks arising from financial instruments

IFRS 9: Financial Instruments

  • Background as to the replacement of IAS 39
  • Recognition and classification
  • Measurement and impairment
  • Reclassification, derecognition and modifications
  • Derivatives and hedging
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