Research On Hedge Accounting Standard Problems

Companies can’t avoid all kinds of exposed risks in economic activities, such as foreign exchange risks, rate risks and price risks. With the globalization extending and intensified, enterprises are facing more and more risks. How to succeed managing the varied risks is kind of an important issue that the companies need to tackle.With innovative financial instruments, hedging activities the company is increasingly becoming an important way to avoid risks. Companies can achieve cost control through a rich and flexible hedging program, smooth earnings, risk aversion and other effects.Hedge accounting criteria, regardless of the formulation or execution, accounting standards are difficult. Coupled Derivative financial instruments of innovation after another, the needs of enterprise risk management is increasingly strong, making the importance of hedge accounting are also prone highlighted. Especially after the 2008 global financial crisis, the international community about whether hedge accounting should exist, how to simplify hedge accounting and other issues are discussed extensively. However, in China, due to financial derivatives market is not mature, risk-averse corporate awareness and skill level is not high use of hedging instruments, hedging activities are not active. Although China has the appropriate criteria for hedge accounting, but businesses in the guidelines of the extent and level of utilization is not high.First of all, the first chapter of the history of the revised IASB and FASB hedge accounting to sort out, focusing since 2005, both in the financial instruments of the convergence criteria formulated and their characteristics are summarized. The second chapter, get to know the definition of hedging activity and the principle of both hedging, hedging activity by a summary of the characteristics of the analytical challenges of its particularity "traditional accounting" in recognition, measurement and disclosure brought. Second, identify the hedging relationship (including hedging instruments, hedged item, etc.), the application of hedge accounting conditions, evaluate the effectiveness of hedging and hedge accounting information disclosure,carding change IASB and FASB hedge accounting criteria, comparison with China’s current CAS24 No. criteria. In the third chapter of the listed companies in China’s three sectors (coal, nonferrous metals, financial) hedge accounting usage investigate the other hand, the application of hedge accounting in terms of the problems. Finally, in the fourth chapter for the application of hedge accounting country, combined with the trend of international accounting standards, and put forward specific proposals for the amendment of hedge accounting standards.