book

Accounting for Investments, Equities, Futures and Options, Volume 1

Name: Accounting for Investments, Equities, Futures and Options, Volume 1
Author: R. Venkata Subramani
ISBN: 9780470824313

by R. Venkata Subramani

June 2009

Intermediate to advanced

650 pages

15h 47m

English

Wiley

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Cover
Contents
Title
Copyright
Dedication
Foreword
Preface
Acknowledgments
Chapter 1: Financial Instruments
Learning ObjectivesAccounting Standards for Financial InstrumentsDefinition of Financial InstrumentsCategories of Financial InstrumentsFair Value Measurement ConceptsRecognition and Derecognition of Financial InstrumentsTypes of InvestmentsDifference between Investment and SpeculationTwo Major Standards: U.S. GAAP and IFRSSummaryExercises
Chapter 2: Accounting for Equity Investments: Trading
Learning ObjectivesAccounting Standards for Equity InvestmentsDefinition of Equity SecuritiesPassive Investments: Less than 20 PercentSignificant Influence: 20–50 PercentControlling Interest—More than 50 PercentExchange-Traded Securities versus Over-the-counter SecuritiesThe Trade Life Cycle for Equity Trading SecuritiesFX Revaluation and FX Translation ProcessTrade Date Accounting versus Settlement Date AccountingDistinction between Capital Gains and Currency GainsSummaryExercises

Chapter 3: Accounting for Equity Investments: Available-for-Sale
Learning ObjectivesAccounting Standards for Equity Investments: Available-for-saleBasic Understanding of AFSThe Trade Life Cycle for Available-for-sale EquityFX Translation on AFS SecuritiesImpairment of AFS SecuritiesSummaryExercises
Chapter 4: Transfer of Categories
Learning ObjectivesTransfer between CategoriesPresentation in Income StatementDeferred Tax Effects on Unrealized Gain/LossSummaryExercises
Chapter 5: Equity Derivatives: Theory
Learning ObjectivesAccounting Standards for Equity DerivativesDerivatives in a Financial SecurityDefinition of Derivatives per Accounting StandardsForward ContractFutures ContractFutures versus ForwardsComponents of a Futures ContractOpen Interest in Derivatives ContractsMethod of Computing Open InterestWhat Does Change in Open Interest Indicate?Pricing of a Futures ContractStock Futures and Index FuturesSummaryExercises
Chapter 6: Accounting for Equity Index Futures
Learning ObjectivesThe Trade Life Cycle for Equity Index FuturesIllustrations with FX TranslationSummaryExercises
Chapter 7: Accounting for Equity Stock Futures
Learning ObjectivesTrade Life Cycle for Equity Stock FuturesIllustrationsSummaryExercises
Chapter 8: Accounting for Equity Call Options
Learning ObjectivesAccounting Standards—Derivative Instruments and Hedging ActivitiesTrade Life Cycle for ETOs—Long Call Non-hedgingIllustrationsTrade Life Cycle for Exchange-Traded Options—On Writing a Call OptionIllustrationsSummaryExercises
Chapter 9: Accounting for Equity Put Options
Learning ObjectivesTrade Life Cycle for Exchange-Traded Options—Long Put, Non-hedgingIllustrationsTrade Life Cycle for Exchange-Traded Options—On Writing a Put OptionIllustrationsSummaryExercises
Chapter 10: Equity Options: Hedge Accounting
Learning ObjectivesAccounting Standards—Derivative Instruments and HedgingThe Trade Life Cycle for ETOs—Long Put as HedgingIllustrationsSummaryExercises
Chapter 11: Accounting for Contract for Difference
Learning ObjectivesDefinition of CFDProduct Features of CFDsThe Trade Life Cycle for CFDsIllustrationsSummaryExercises
Chapter 12: Accounting for Short Equity Investments
Learning ObjectivesDefinition of Short Equity SecuritiesTypes of Short SalesProcess of Short-sellingRisks of Short-sellingBox Position and Short-sellingRationale of Short-sellingRegulatory Requirements of Short SalesSecurities LendingThe Trade Life Cycle for Equity Short SalesIllustrationsSummaryExercises
Chapter 13: Accounting for ADR/GDR Investments
Learning ObjectivesDefinition of a Depositary ReceiptIssuance and Cancellation of DRsDR Ratio and PricingBenefits of DRs to IssuersBenefits to InvestorsWhat are ADR and GDR?Different Types of ADR IssuesRisks Associated with Investment in DRsRestricted ProgramsThe Trade Life Cycle for Equity ADR SecuritiesIllustrationsSummaryExercises
Chapter 14: Presentation and Disclosures
Learning ObjectivesAccounting Standards for Presentation and DisclosurePresentation in Income StatementDifferences between U.S. GAAP and IFRSDisclosure Requirements under U.S. GAAPDisclosure Requirements under IFRSRequirements by IFRS 7Statement of Profit and Loss and EquityOther DisclosuresMarket RiskSummaryExercises
Appendix A: Basics of Accounting Theory
Appendix B: Accounting Standards for Financial Instruments
Appendix C: Financial Statements of Sample Fund
Appendix D: Glossary of Technical Terms
Bibliography
Index

Overview

The 2008 financial crisis highlighted the need for responsible corporate governance within financial institutions. The key to ensuring that adequate standards are maintained lies with effective accounting and auditing standards. Accounting for Investments: Equities, Futures and Options offers a comprehensive overview of these key financial instruments and their treatment in the accounting sector, with special reference to the regulatory requirements. The book uses the US GAAP requirements as the standard model and the IFRS variants of the same are also given.

Accounting for Investments starts from the basics of each financial product and:

defines the product
analyses the structure of the product
evaluates its advantages and disadvantages
describes the different events in the trade cycle
elaborates on the accounting entries related to these events.

The author also explains how the entries are reflected in the general ledger accounts, thus providing a macro level picture for the reader to understand the impact of such accounting.

Lucidly written and informative, Accounting for Investments is a comprehensive guide for any professional dealing with these complex products. It also provides an accessible text for technology experts who develop software and support systems for the finance industry.

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Accounting for Investments, Volume 2: Fixed Income Securities and Interest Rate Derivatives—A Practitioner's Guide

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