Research On Hedge Accounting Criteria Problems

Hedge accounting has been considered as the exception of general accounting recognition and measurement, it was also the most complex question that troubled the financial statement prepares, the accounting information users, auditors and setters. The financial statement prepares believed the hedge accounting criteria were too complex to comply. The accounting information users could not understand the risk managed activities the enterprise carried out and their effects. The auditors and financial statement prepares could make different interpretations for the same result, the hedge accounting criteria were lack of auditability. They urged the international accounting standard board(IASB) to develop principal oriented criteria and reduce the complexity. The IASB listened to the stakeholders from different industries all over the world, finally he issued the international financial reporting standard 9(IFRS9) chapter 6 hedge accounting standard, which substituted the original provisions in intentional accounting standard 39(IAS39). The hedge accounting standard in IFRS9 remained the framework of hedge accounting criteria in IAS 39 the same, just amendment the accounting rules, Overcame many defects of the original criteria. However, as the hedge accounting standard itself is very complex and the revision of the criteria is of rush, hedge accounting standards in IFRS9 still exit many questions. Under the situation of the international accounting standards convergence, we predict China will soon set off the climax of the hedge accounting criteria reform. We suggested that in standards convergence process foster strengths and circumvent weaknesses,and make the hedge accounting standards closer to the actual situation of our country. This article adopts the method of normative research and comparative analysis, we analyzed the principal and content of the hedge accounting standards in IFRS9 theoretically, used the stakeholder theory to analyze the reason why this reform happen, On the basis of the theory with practice,we make proposes for the reform of accounting standards in China.Firstly, a review of the hedge accounting criteria development process in the U.S. accounting standards board and the international accounting standards board and our country enterprise accounting standards committee, we also introduced the scholar’s research of the criteria and its application as well as the proposes for amendment. Then we analyzed the principal and content of hedge accounting standards in IFRS9 from five aspects, including the objective of hedge accounting and hedge relationship designation, accounting, rebalance and discontinuance, and disclose. And then review on the advantages and disadvantages of the hedge accounting standards in IFRS9. By reading annual reports that listed companies disclose in shanghai market, we analyzed the actual situation of the hedge accounting application. Finally we put forward proposes from the following aspects: positioning the hedge accounting criteria accurately, clear the target of the hedge accounting, Cautious to expand the scope of the hedging instrument and the hedged item, strictly defined the rebalancing and perform the information disclosure policy.