International GAAP 2012: Generally Accepted Accounting Practice under International Financial Reporting Standards

Chapter 42

Financial instruments: Introduction

1 Introduction

1.1 IAS 32

1.2 IAS 39

1.3 IFRS 7

1.4 IFRS 9

2 How Financial Instruments are Dealt With in Chapters 42 to 52

3 Evolution of A Full Fair Value Accounting Model

4 Adoption of IFRS in The European Union

5 Impact of the Financial Crisis on Accounting for Financial Instruments

5.1 The start of the crisis

5.2 Autumn 2008: the worst of the crisis?

5.3 Immediate consequences of the crisis

5.4 The IASB’s longer-term responses to the crisis

1 Introduction

The IASB’s accounting requirements for financial instruments are regarded by many as some of the more difficult to understand. There are many likely reasons for this, including the fact that it is such a broad topic encompassing some of the more complex contracts entities enter into. In addition, the requirements have been subject to a process of almost continual change over the last fifteen years or so and are dealt with in a number of different standards and other pronouncements.

The following are the standards which deal primarily with the accounting for financial instruments:

• IAS 32 – Financial Instruments: Presentation;
• IAS 39 – Financial Instruments: Recognition and Measurement;
• IFRS 7 – Financial Instruments: Disclosures; and
• IFRS 9 – Financial Instruments.

In addition a number of interpretations address the requirements of these standards, including:

• IFRIC 2 – Members’ Shares in Co-operative Entities and Similar Instruments;
• IFRIC 9 – Reassessment of Embedded Derivatives; ...