How New Impairment Rules in IFRS 9 Affect You
In July 2014, the standard IFRS 9 was finally completed and the latest amendments brought us new impairment rules (besides the other things). In my humble opinion, new impairment rules will cause a lot of headaches for mainly financial institutions. Why? Well, they will have…
Difference Between Fair Value Hedge and Cash Flow Hedge
The first thing you need to do before you even start to play with hedge accounting is to determine the TYPE of hedge relationship that you’re dealing with. Why? Because: the type of hedge determines your accounting entries. Make no mistake here. If you incorrectly…
Hedge Accounting: IAS 39 vs. IFRS 9
Business world as of today presents a huge amount of various risks to almost every company or entrepreneur. I’m sure that also your company faces at least some of these risks: foreign currency risk, price risk, inflation risk, credit risk – just name it. Many…
How to Account for Compound Financial Instruments (IAS 32)
Compound financial instruments became very common way of raising cash by many companies, but their shareholders don’t like them that much. Why? Because many compound financial instruments contain the option to convert into shares. Just imagine you purchased convertible bond that gives you the right…
How to Extrapolate Along Yield Curve
Recently, during my lecture about financial instruments, I got a very interesting question from one clever participant. To give you a little background: He was a finance guy working in a huge company and for sure, he came across various accounting issues and problems. One…
IFRS 9 Financial Instruments 2012
Update 2017: This is an article from 2012 and I wrote the totally updated article in 2017 here. However, there’s a valuable discussion in the comments to this article, and that’s why I did not delete it, but left it here. Please, if you have…
IAS 39 vs IFRS 9
People are very creative and inventive. So they created and invented numerous kinds of financial instruments. Just admit it—are you really versed well in derivatives, various share options, warrants, certificates, convertible bonds and many others? This area happens to be so complicated and difficult to understand,…
