Financial Skills: Accounting for Financial Instruments

Course Overview

This course will provide an introduction to the principles behind the accounting entries for financial instruments. It assumes prior knowledge of basic double-entry book-keeping. Participants should have either an accounting background or have attended one of our 'Accounting Principles' courses. A basic knowledge of the products would also be useful (courses covering this are in our treasury programme).

The course involves practical application of the accounting principles with a comprehensive case study involving the accounting entries for the financial instruments. There will be an overview of the impact of the adoption of IAS 32 and IAS 39 on the accounting approach and entries.

Course Outline

KEY CONCEPTS OF FAIR VALUE, MARK TO MARKET AND HEDGING ACCOUNTING

• Which method to apply?
• The impact of each method on the balance sheet and P & L

OVERVIEW OF IMPACT OF ADOPTION OF IAS 32 AND IAS 39 ON THE ACCOUNTING APPROACH AND ENTRIES

• Definitions and classifications
• Steps in accounting process
• Hedge accounting criteria, fair value and cash flow hedges, effectiveness

BASIC ACCOUNTING CONCEPTS

• Identifying accounting events -cashflow or accruals
• Accruals accounting
• Multicurrency ledger accounting
• Base currency
• Position accounts
• Revaluation process
• Mark to market and unrealised P & L

ACCOUNTING ENTRIES FOR A VARIETY OF FINANCIAL INSTRUMENTS

• Foreign exchange contracts
• Securities
• Money market loans and deposits
• Discounted instruments
• Swaps
• Futures

CASE STUDY

• Comprehensive practical case study involving accounting entries for a range of financial instruments and period end revaluation of multicurrency ledgers

Financial Skills: Accounting for Financial Instruments / FS-AFI