In recent years the use of derivatives and other financial instruments, in particular for treasury risk management, has increased substantially. This has resulted in complex accounting rules issued by the Financial Accounting Standards Board (FASB) in order to properly reflect the impact of these items in the financial statements. These complex rules have made the application of US GAAP in the area of financial instruments challenging.
This two-day course provides an in-depth illustration and explanation of the requirements of ASC 825 Financial Instruments, ASC 815 Derivatives and Hedging, and ASC 820 Fair Value Measurement. Utilizing practical examples and hands-on exercises, this course demonstrates the rules for classification, recognition, derecognition, measurement and impairment of financial instruments; application of the effective interest method; and determining the distinction between financial liabilities and equity. In clear and simple language, our specialist instructors also explain the rules for derivatives, embedded derivatives, and hedge accounting. The extensive disclosure requirements in relation to financial instruments are also discussed and illustrated.
This course answers questions such as:
- How should financial instruments be classified and what are the changes effective from 2018?
- What are the restrictions on reclassifications of financial assets?
- What is the ‘fair value option’ and how is it applied?
- How is the effective interest rate calculated?
- How is impairment of financial assets measured and accounted for, and what are the proposed changes to measurement of credit losses?
- What are the requirements for hedge accounting?
- When should embedded derivatives be separated?
- What are the current disclosure requirements in relation to financial instruments and what is the impact of changes to the accounting for financial instruments?
- How and when is GAAP changing as a result of amendments published to date?