Financial Instrument Accounting

Course Overview

This training course aims to provide a hands-on knowledge of the accounting of financial instruments in accordance with IAS/IFRS statements (IAS 32, IAS 39, IFRS 7). The spotlight is deliberately put on practical applications

Course Objectives

Course Outline

Typology and accounting principles of securities

- General introduction to the IAS 32 and IAS 39 statements : amortized cost, fair value
- Depreciation criteria and depreciation mechanisms of financial assets
- Classification of financial assets and financial liabilities

Application : comparison between IFRS and GAAP statements

Implementation on letters of credit, debt securities, equity capital

- Initial evaluation : generating fact, portfolio classification, accounting
- Final evaluation : fair value and amortized cost methods
- Depreciation of financial instruments and funding
- Asset and liability de-recognition : assignment of receivables, securitization

Hedge accounting : definition and typology

- Actions on derivatives using the IFRS framework
- Definition et aims of the hedge : efficiency tests
- Actions on hedges : fair value, cash flows, net foreign investment
- Impact on the income statement

Application - accounting of several hedge operations

- Hedging of a variable rate debt using an interest rate swap
- Hedging of a fixed rate debt using a cross-currency swap
- Hedging of an equity portfolio using a total return swap
- Hedging of translation risk using forward contracts