Study On Problems In Recognition And Measurement Of Financial Instruments

As the integration of the world economy and financial environment, there's an urgent need for an accounting standards to unify the complex financial instruments. However, the complexity of the financial instruments, the different amendment orientations of the practitioners and the game process of different organizations make the improvement difficult. To further simplify the accounting of financial instruments and address the financial crisis, IASB decided to revise new criteria for phasing out the IAS39. It issued IFRS 9 in October 2010, completing the work about classification and measurement of financial instruments. In the context of the convergence of international accounting standards, China promulgated a new corporate accounting standard in 2006, which included the four specific criteria for financial instruments. As we know, China's financial instruments accounting standards refer to the content of the related international accounting standards, but these international guidelines are still in constant evolution and improvement, hence enhancing the understanding of IFRS 9, tracking the process of IASB and participating to the international norms'improvement of financial instruments is necessary to China's standards improvement.This paper includes the following sections:The first chapter introduces the research background and significance of the topic. Then combined with the research situation, it raises the issues which will be discussed and the research methods that will be used.The second chapter details the changes in the classification and measurement between the IAS 39 and the IFRS 9, and evaluates the changes of the IFRS 9. Respectively, it discusses the changes aspects of financial assets and financial liabilities, recommendations described in the draft and the reasons for change, and then it simply elaborates the pros and cons of changes.The third chapter introduces the application status in recognition and measurement of financial instruments of CAS 22.It analyzes the current situation in application in China through the data of annual reports of listed companies, including of Youngor. At last it summers up the existing problems in recognition and measurement.The fourth chapter mainly describes the expected impact on China of the IFRS 9 from aspects of the theoretical and practical, combined with the relevant data to enhance analysis persuasive.The fifth chapter discusses expected difficulties in China's in the use of IFRS 9.Then it provides some suggestions for improvement in China's financial instruments accounting based on the foregoing analysis.The contributions and weaknesses of this article are as follows.The contributions are:Firstly, it reviews the changes of IFRS 9 in comparative to the IAS 39, and analyzes the reasons for the changes from the perspective of the draft. Secondly, it analyzes the current status of classification and measurement, with the data from annual report. And it finds that there are some problems, which will in turn make us consider whether the improvements in IFRS 9 are beneficial and feasible. Finally, it analyzes the expected impact of a possible in empirical analysis to a certain extent, and provides the practical choices of the revised guidelines for China.The shortcomings are:First, it analyzes the classification and measurement from the overall levels not from the in-depth different levels. For example, in the analysis of classification, it doesn't discuss the choice of initial classification and reclassification. In the analysis of measurement, it doesn't distinguish between the initial measurement, subsequent measurement and termination of measurement. Second, in the analysis of application of financial instruments standards in China, it intercepts the overall data from annual reports of listed companies instead of separate industry. Especially, it only selected a company as the object of study in the analysis of different measurement choices. This may not be representative of all industry conditions, and has certain narrow-mindedness. Finally, although it has researched between the financial sector and non-financial industries in the analysis of expected impact of IFRS 9, but the data did not cover all of the listed companies, and has a simply re-classification research to the impact of non-financial in manufacturing. There needs a further study of the future impact.