Derivatives in accounting
Derivatives in accounting

Author(s): Katarzyna Czajkowska, Dawid Obrzeżgiewicz
Subject(s): Economy, Business Economy / Management, Energy and Environmental Studies, Accounting - Business Administration, Business Ethics
Published by: Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu
Summary/Abstract: One type of financial instruments are derivatives whose price depends on the value of the underlying instrument. There are two different approaches to accounting of derivatives: general model—in which derivatives are presented as assets or financial liabilities, measured at fair valueand referred to the financial result, and hedge accounting—which requires symmetrical recognition of changes in the value of the hedged item and the hedging instrument. Information on derivatives is presented in the financial statements. The derivative is reflected in the balance sheet of the entity that is a party to a given contract, while the result obtained on the derivative contract is presented in the profit and loss statement.

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