Accounting For Derivatives Advanced Hedging Under IFRS 9

Whilst IFRS 9 is set to replace IAS 39, practitioners need to adjust their accounting policies and hedging strategies to conform to the new standard. Filled with expert guidance and practical advice, the Second Edition of Accounting for Derivatives is the resource that covers IFRS 9 specifically for the derivatives practitioner.

The Second Edition of Accounting for Derivatives explains the accounting implications of a proposed transaction on derivatives strategy that is in alignment with the IFRS 9 standards. This important resource contains the author's insights gained from working with numerous companies to minimise the earnings volatility impact of hedging with derivatives.

Thoroughly revised and updated, the second edition to this landmark book incorporates the changes to the new IFRS 9 standards which were put in place to safeguard investors by achieving uniformity and transparency in the accounting principles. This vital resource contains a number of new concepts related to derivatives including new hedge effectiveness assessment requirements, rebalancing and hedge ratio determination, a wider eligibility of hedged items, and a special treatment for options, forwards and cross currency swaps. The author has also included a range of fresh cases that reflect updates to the commodities and equity risk management. Three completely new chapters provide a summary of IFRS 13 Fair Value Measurement with a special emphasis on credit/debit valuation adjustment, (CVA/DVA), addresses hedging of share-based compensation plans, and the third new chapter covers inflation risk.

Under IFRS, derivatives that do not qualify for hedge accounting may significantly increase earnings volatility. Compliant application of hedge accounting requires expertise across both the standards and markets, with an appropriate balance between derivatives expertise and accounting knowledge. Accounting for Derivatives can help bridge the divide, providing comprehensive IFRS coverage from a practical perspective.

Professional accountants, corporate treasurers, bank financial engineers, derivative salespersons at investment banks and credit/equity analysts will find Accounting for Derivatives to be an invaluable resource for understanding and applying the principles of IFRS 9.