International Accounting Standard 39

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The International Accounting Standard 39 ( IAS 39 ) is an accounting regulation of the IASB . IAS 39 regulates the recognition and measurement of

  • financial assets,
  • financial liabilities and
  • certain contracts for the purchase or sale of non-financial items.

In particular, IAS 39 also regulates the recognition and measurement of derivatives. An important aspect of IAS 39 in this context is what is known as hedge accounting . The standard is generally to be applied by all accounting entities (entities) to all types of financial instruments .

IAS 39 is at the same time - with the status approved by the Commission - binding EU balance sheet and EU reporting rule. Among the various accounting standards, IAS 39 is the most controversial and discussed rule.

Development and application of IAS 39

Work on a standard for the recording, measurement and disclosure of financial instruments began in 1988. IAS 39 was preceded by three drafts:

  • E 40 Financial Instruments 1991
  • E 48 Financial Instruments 1994
  • E 62 Financial Instruments: Recognition and Measurement 1998.

During this phase, the disclosure rules were separated and passed in a separate standard in 1995: IAS 32 Financial Instruments: Disclosures and Presentation. IAS 39 was issued in December 1998 and was only intended as an interim standard. Immediately after its publication, the IASC / IASB set up a new topic-specific project. At the same time, efforts begun in 1997 in collaboration with other standard setters to greatly expand the use of fair value in accounting for financial instruments continued . They finally culminated in the publication of a draft standard in 2000, which, however, has not yet met with great success. According to the minutes of the IASB from January 2010, the fair value generic term in the IAS / IFRS valuation scheme should move away from mark-to-market to mark-to-model, ie to mathematical-stochastic valuation formulas.

scope of application

IAS 39 regulates the recognition and measurement of financial assets and financial liabilities and must be applied to all financial instruments. Exceptions to this area of ​​application are regulated by IAS 39.2. In accordance with IAS 32 , IAS 39.8 defines a financial instrument as follows:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

A financial instrument is understood to mean all contractual claims and obligations that directly or indirectly relate to the exchange of means of payment. The rights or obligations resulting from contracts or agreements must be based on financial facts. According to IAS 39, financial instruments can be divided into financial assets, financial liabilities and equity instruments.

The description of a financial asset borrowed from IAS 32 includes the following items and rights in accordance with IAS 32.11:

  1. Cash and cash equivalents,
  2. an equity instrument of another firm,
  3. a contractual right,
    • To receive cash or any other financial asset from another entity; or
    • to exchange financial assets or financial debts with another company on potentially advantageous terms
  4. a contract that will or can be performed in the company's own equity instruments and in which
    • a non-derivative financial instrument contains or may contain an obligation of the company to receive a variable number of own equity instruments
    • a derivative financial instrument will or can be fulfilled in another way than by exchanging a fixed amount or another financial asset for a fixed number of own equity instruments.

In contrast, a financial debt or liability is

  1. a contractual obligation
    • deliver cash or any other financial asset to another entity
    • Swap financial assets or financial liabilities with another company on potentially unfavorable terms
  2. a contract that will or can be performed in the company's own equity instruments and in which
    • A non-derivative financial instrument contains or can contain an obligation on the part of the company to dispose of a variable number of own equity instruments
    • a derivative financial instrument will or can be fulfilled in another way than by exchanging a fixed amount or another financial asset for a fixed number of own equity instruments.

An equity instrument (equity instrument) is in accordance with IAS 32 and IAS 39 an agreement that has a residual interest in the assets of an entity after deducting all obligations to the object.

According to IAS 39.9, a derivative exists if, for a financial instrument:

  1. the value depends on a base object or underlying, such as the interest rate , share , foreign currency, etc.,
  2. Compared to other instruments that react in a similar way to changes in market conditions, no or only a small net investment is necessary, and
  3. the due date is in the future.

Valuation principles

In its current version, IAS 39 is basically based on a so-called "mixed model" of valuation. This means that the standard elements of both balance sheet at amortized cost , as well as elements of the valuation at fair value ( fair value contains). The assessment is based on the categories of balance sheet items (called IFRS categories ).

The amortized cost of a financial asset or financial liability ( amortized cost of a financial asset or financial liability ) is, according to IAS 39.9, the amount at which it was valued upon initial recognition, minus repayments , plus or minus the accumulated using the effective interest method Amortization of any difference between the original amount and the amount at final maturity, plus any deductions (either directly or through the use of an impairment item) for impairment or uncollectibility. The effective interest method is used to calculate the amortized cost and the allocation of interest income and expenses over the respective period. The effective interest rate is the discount rate used to discount estimated future cash payments or receipts during the expected term of the financial instrument to the net book value of the financial asset or financial liability.

IAS 39.9 refers to the fair value or fair value as the amount, between knowledgeable, willing and independent business partners ( in at arm's length transaction ) exchanged an asset or a liability can be paid. The term fair value can be translated as market value or fair value. However, the term "fair value" is deliberately differentiated from a possible " market value " in order to take into account the fact that there is no stock exchange or market price for a large number of financial instruments and that these are only determined with the help of models can. IAS 39 primarily provides for publicly quoted market prices to determine fair value. If there is no active market, the fair value can be determined using valuation methods:

" Valuation techniques include using recent arm's length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. "

See also

literature

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