Research On Application Of Hedge Accounting In Thermal Power Enterprises

During the process of deepening electric system reform and gradually opening electricity market, thermal power enterprises have to face numerous risks. It becomes a major challenge for each thermal power enterprise to make risk management and ensure a stable and healthy development. Hedging is the classical theory of the futures market which originated in the futures market. With the rapid development of the economy and society, futures market became mature, and more and more enterprises began to use hedging in futures market in order to transfer the risks. When conditions permit, it is a solution to avoid the risk of management that thermal power enterprises use hedging in futures market.This article first studies the current situation of the thermal power enterprises, mainly analyzes thermal power business and managing risk, and then proposes the condition of hedging in thermal power Enterprise futures. Secondly, this article builds a framework on hedge accounting in thermal power enterprises, including futures hedging program design and application of hedge accounting. In order to record hedging transactions thermal power enterprises have to apply hedge accounting. The application of hedge accounting is record hedging transactions of thermal power enterprises. According to characteristics of thermal power plant, this paper designs a program of hedging in futures and uses accounting methods to deal with related economic matters in thermal power enterprises. Finally, I suggest that thermal power enterprises should compile comprehensive income statement, establish hedge sector performance evaluation standards, and enhance the control of risks in futures hedging and management in the process of application of hedge accounting.