The Research Of The Use Of Interest Rate Derivatives And Foreign Exchange Derivatives In Enterprises Financial Management

Financial derivative instruments have important application significance in financial management of Chinese enterprises. This paper hopes to through the analysis of maximizing the role of financial derivative instruments in the financial management of China Company. The value of a derivative through the application of its securities and derivative, Chinese enterprises can make full use of financing technology, in the form of market transactions, flexible, effective, creating more financing and investment for Chinese enterprises. Through careful analysis, demonstrated the financial derivative instruments in the application of Chinese enterprises, increasing diversity financing and investment, effectively promote the liquidity of financial markets, reduce financing cost, to the important role of the two distribution enterprise risk transfer and benefit from.At the same time, the risk of financial instruments can effectively identify risks. This is the second important functions of financial derivative instruments. The flexible application of hedging risks can reduce the uncertainty of economic activities. White type of small broad financial derivative instruments charm, although it has no value in itself, but you can get high profits, so the risk everywhere. It has important significance with the internal control and the combination of strategies for risk control in the enterprises in the application of financial derivative instruments.This paper first introduces1ASC, FASB as well as the definition of China’s Ministry of Finance on derivative financial instruments. The basis of derivatives include futures and forwards, swaps, options and other three categories. Financial derivative instruments market has a rapid development in the world, because derivatives have the following two important functions:risk management and price discovery. It introduces the application and development of financial derivative instruments in china,In exchange for the basic tools of financial derivative instruments, including forward exchange agreement, foreign exchange futures, foreign exchange options, currency swaps. Foreign exchange derivatives are mainly used to avoid foreign exchange risk. Application of foreign exchange derivatives in the financial management of the enterprises are mainly in the following aspects:enterprise financing activities in the international financial market can use the foreign exchange derivatives using currency swaps of debt management; reducing the cost of financing; foreign exchange accounts payable management hedging; in international investment, enterprises can avoid exchange rate risk investment in the face of foreign markets by using foreign exchange derivatives.The carrier rate or rates for basic tool of financial derivative instruments include a variety of forward rate agreements, interest rate futures, interest rate options, interest rate swaps. Interest rate derivatives are mainly used to avoid interest rate risk. Application of interest rate derivatives in the financial management of the enterprises are mainly in the following aspects:the use of long-term interest rates, interest rate futures, interest rate risks prevention, locking the financing cost; use interest rate swaps to reduce financing cost. Application of equity derivatives in the financial management of the enterprises are mainly in the following aspects:the listing Corporation to issue convertible bond financing; stock options to help the company to reduce costs, to achieve maximum value.Finally, this article on the financial derivative instruments market risk, credit risk, liquidity risk, operational risk, counterparty risk and legal risk and other6categories of risk to row of detailed analysis, the internal control of enterprise application of derivative financial tools, establish a sound internal control system, improve internal control strategy of6types of risk.In twenty-first Century ten major problems:one of the accounting of derivative financial instruments accounting. Because of China’s late in the research of Financial derivative instruments in the beginning, the theory and the practice foundation is not solid, especially the serious lack in systematic, innovative research achievements. This paper from the theoretical research and case analysis, emphasis on theory, and pay attention to practice, research subject will be the financial derivative instruments. The innovation itself is a dominant feature. The new " accounting standards for business enterprises " issued by the Ministry of Finance in2006in China under the background, on how to use financial analysis of financial management in Chinese enterprises derivatives, forward foreign exchange derivatives, interest rate derivatives and equity derivatives in speculative arbitrage, financing and investment management, risk control and avoid the application of strategies and techniques, and based on the internal control strategy is effective, deduction and induction of risk management in the financial management of enterprise. Can say, theoretical research combined with case analysis, a major innovation of this paper and the practice is also this article, in order to provide meaningful reference to the financial management and financial derivative instruments of China enterprises.