A Study On Hedge Accounting Of Derivative Financial Instruments

As China's domestic market and international market Continuous integration, Domestic enterprises are facing such as interest rate, price and credit risk and become more and more complex. Enterprises in order to avoid these risks, have been applied more and more variety of derivative financial instruments to hedge. This paper applies normative and case studies method to analyzing both in hedge accounting and its application in practice.This paper is divided into the following sections. The first chapter describes some of the background of this study, methods and ideas. As hedging instruments are mainly financial derivatives,foreign accounting hedging regulations included in the financial derivative instruments accounting standards.So in Chapter two introduce developmental course of hedge accounting standards of States and the International. Chapters 1 and 2 of this paper are the theoretical basis of full text studies.Chapter3 explore the motives and meaning of hedging including the price insurance and corporate credit, etc. Then from the accounting point of view, discuss necessity the need for hedge accounting, Chapter 4 analysis the hedge accounting from the recognition, measurement and disclosure requirements。Then analyze difficult for hedge accounting of cash flow hedges and fair value hedging. on the basis of first four chapters theoretical foundation and related standards. Chapter5 use descriptive statistics method. This paper select China copper mining and manufacturing companies for the sample data of listed companies, analysis application of hedge accounting. Pointed out that the following issues:hedge accounting standard is complicated and lead to practical applications of high cost. The choices of accounting methods change the basis of presentation of financial statements. Then analyze introduce the case of Zhejiang Yong Qiang cash flow hedges.The final chapter give some recommendations:improve the quality of hedge accounting information and establish a unified set of styles of accounting information.Establish a sound system of the stock short, increase the supply of hedge accounting information. Simplified method of hedge accounting treatment and improve the professionalism of accounting practitioners. And other aspects of improving the accounting treatment of hedging.