International Comparison Of The Accounting Standards For Financial Instruments

Accounting standards for financial instruments is one of the most complex areas. Standard-setting institutions in many countries have spent a lot of financial, material and human resources in this field. After 20 years' development, how far have financial instruments accounting standards progressed? What kinds of problems have been solved? What important enlightenments they may have in China? Motivated by these questions, this study carries out an international comparison.Recognition and measurement have been two key difficult issues in financial instruments accounting standards setting, and also two foci of the present research.So far, agreement has been reached on recognition of derivatives. So the focus of the studies on financial instruments has moved to measurement which is more complicated. Most countries have to adopt mixed measurement model because of the difficulty in implementing the fair value.This paper firstly makes a review of the international development of standards. which involve solid theoretical foundation, long-term accumulated experience and employees with high quality. These are just what we are short of. The study begins with the issues of recognition and measurement, with special attention to the initial recognition of financial instruments, measurement attributes of initial recognition, the classification of financial assets and financial liabilities and follow-up measurements, fair value option and two models: mixed-measurement model and comprehensive model. The author found that fair value option is introduced and results to the difficulty in the analysis of the nature of mixed-measurement model because of the categorization of financial assets and liabilities. Furthermore, the thesis studies the financial instruments accounting standards in China. As China's financial instruments accounting standards mainly follows International Financial Reporting Standards (IFRS), therefore, the formulation and application of the standards in China are paid special attention to. And the present research found that strategies of the listed companies have great impact on the categorization of financial assets; There are biases to the categorization in the management of the listed companies which make the financial assets available for sale be an impounding reservoir of profits; The fair value of financial instruments included in current changes in the profit and loss, not only makes up the profits for listed companies but also has a decisive impact on the net profit; The use of derivative financial instruments in China majority concentrated in the financial sector; There are a lot of cross-shareholdings listed companies in China, which has had a substantial impact on the net profit of listed companies; Strategies of the listed companies have great impact on the categorization of financial assets.In addition, the analysis part of the thesis selects three cases CAO, CNCRC and CHINA FORCE OIL & GRAINS, which have experienced huge losses in the international financial markets, revealing the existing problems, and drawing the lessons from their subsequent failures. Finally, the thesis evaluates China's financial instruments accounting standards, and gives corresponding suggestions.