Problems Of Accounting Measurement Of Derivative Financial Instruments Discussed

In the late 1980s,financial innovations in a surprisedly development swept the entire international financial market, and its derivatives ,which are different from traditional instruments, became the most important part of modem financial market. Financial instruments are risk diversification instruments, nevertheless, they are big sources of risks too. How to set up the supervision & management systems for accounting practices including financial derivatives is international focus.From International Accounting Standards Commission(IASC) to the authorities for accounting principles in each nation to the academy ,they are doing their best to identify ,to measure ,to report financial derivatives, fortunately with never-ending new approaches being contributed to the frame of accounting principles. On December 17, 2003,International Accounting Standards Board(IASB) amended IAS39, furthermore to make sure the model of fair-value measurement for financial derivatives is generally implemented.China's research in accounting practice for financial derivatives started in the early 90s, but it mainly focused on introductions of the trends of international accounting principles, as a consequence with little creative systematic research results .Based on IASC and IASB's accounting measurements, this paper which is also my master's degree of accounting presentation suggests drafting procedures for financial derivatives in China: to set disclosure requirement first, then to identify and to measure .As to accounting fair value measurement of financial derivatives, he author thinks that China should better postpone the international accounting principles. Alternatively China's accountancy may resort to: 1. fair value measurement. For banks and some financial institutes which there financial instruments take a large proportion and have the ability to measure their fair value.2. annotated discoloured and with no identification on sheet for other general firms.3. fully implement of international accounting standards, when there is efficient relevant market with fair value's due proportion in report statements.