On Financial Derivative Instrument Accounting And Its Development Countermeasures In China

Exuberant and ever innovative financial derivative instrument (FDI) have appeared in the international financial market since 1970s. In traditional accounting, financial assets and financial debts caused by the transaction of financial derivative instruments are not included in the form of financial debts, at the same time, the profits risks caused by them are also excluded out of the form of loss and profit. The great hidden risks from FDIs have a great impact on the theory and practice of traditional financial accounting.Nowadays, FASB and IASC have already set up comparatively authoritative accounting standard for FDIs. In recent years, related management standard has also appeared in China. The thesis is based on the interest in FDIs, the concerns about themand the deep thought about the great effects of the related above-mentioned events.The thesis falls into five parts.The first part firstly points out the significance of the research into FDI accounting, introduces the development of the research in this field around the world and then introduces the following content in the thesis.The second part discusses the definition and causes of FDIs. Based on the different feature of FDIs, and according to their forms, basic assets and transaction methods, FDIs can be divided into 3 types. The features of FDIs-leverage, fluctuation, risks and virtuality of transactional contractors—are also demonstrated. Then different risks of FDIs and their relations with each other are analyzed and explored. The typical risks events of FDIs are also commented.The third part discusses the basic theory and standard of FDI accounting. The problems to be solved are also discussed in this part. It specifies the focus of FDI accounting by contrasting FDI accounting and traditional accounting.The fourth part deals with the development of FDI accounting in China. It first introduces the development history of FDI accounting in China, then discusses the idea and the process of setting up the standard for FDIs in China. It also discusses the current situation and existing problems of FDI accounting in China. Meanwhile, it deals with the practical use of FDI accounting and its effects on the system of the management entities such as the enterprises. Finally, it puts forward the suggestion for the establishment of FDIS in China.In the conclusion, the prospect of the development of FDI accounting in China is discussed. Setting up related accounting standard on the basic of Chinese situation by reference is re-stressed. Developing and improving FDI accounting in China is also re-stressed.