Analysis And Review On The Latest Accounting For Derivative Financial Instruments

With the global integration of international financial market and the speedy development of modern science and technology, derivative financial instruments adapt this economic environment to be more and more widely used. The traditional accounting theories can not go along with the new tendency. How to recognize and measure reasonably, and report fully derivative financial instruments and their risks has been a difficult problem for persons who work on accounting research of both theory and practice- These problems also affect some other disputable ones in the accounting field, such as fair value, in great degree. This article, organized into four sectors, provides an inquiry into accounting problems in derivative financial instruments. Part one is the outline of derivative financial instruments, mainly including the definition, types, functions and features of derivative financial instruments. Part two generalizes the present situation of the research in the derivatives accounting, especially by FASB and IASC. Part three is the key part of the paper. In part three, examples are given to illustrate how to handle the main derivative financial instruments by accounting with regard to the most knotty problems of recognition, measurement and report. Part four takes account of the influences and challenges on the current accounting and the future tendency through the evaluation of several accounting statements for derivatives which reveals the accounting for derivatives.