The derivative practitioner’s expert guide to IFRS 9application
Accounting for Derivatives explains the likely accountingimplications of a proposed transaction on derivatives strategy, inalignment with the IFRS 9 standards. Written by a Big Four advisor,this book shares the author’s insights from working withcompanies to minimise the earnings volatility impact of hedgingwith derivatives. This second edition includes new chapters onhedging inflation risk and stock options, with new cases on specialhedging situations including hedging components of commodity risk.This new edition also covers the accounting treatment of specialderivatives situations, such as raising financing throughcommodity-linked loans, derivatives on own shares and convertiblebonds. Cases are used extensively throughout the book, simulating aspecific hedging strategy from its inception to maturity followinga common pattern. Coverage includes instruments such as forwards,swaps, cross-currency swaps, and combinations of standard options,plus more complex derivatives like knock-in forwards, KIKOforwards, range accruals, and swaps in arrears.
Under IFRS, derivatives that do not qualify for hedge accountingmay significantly increase earnings volatility. Compliantapplication of hedge accounting requires expertise across both thestandards and markets, with an appropriate balance betweenderivatives expertise and accounting knowledge. This book helpsbridge the divide, providing comprehensive IFRS coverage from apractical perspective.
- Become familiar with the most common hedging instruments froman IFRS 9 perspective
- Examine FX risk and hedging of dividends, earnings, and netassets of foreign subsidies
- Learn new standards surrounding the hedge of commodities,equity, inflation, and foreign and domestic liabilities
- Challenge the qualification for hedge accounting as theultimate objective
Keywords: Financial Engineering, Accounting for Derivatives: Advanced Hedging under IFRS 9 Second Edition
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