The use of financial instruments and their complexity has increased enormously over the last twenty years, with high profile examples such as the bankruptcy of Orange County, California illustrating the risks of a poor understanding of the risks attached to such instruments.
Standard-setters around the world have responded by issuing standards to address the accounting for such instruments. In the UK, FRS 26 applies to certain companies and is based on the international standard IAS 39 ‘Financial Instruments: Recognition and Measurement’. Interpreting these standards has proved almost as complex as understanding the financial instruments to which they relate.
Mazars' Financial Reporting Advisory team helps with:
- the mechanics of interest rate and foreign currency swaps, and more exotic derivatives
- accounting for financial instruments, including complex derivatives
- identifying and performing debt/equity splits
- identifying and accounting for embedded derivatives
- specific hedging issues (cash flow hedges versus fair value hedges; hedging documentation and effectiveness tests, identifying optimal hedging strategies, etc)
- applying IFRS 7 for the first time
In addition our technical trainers offer courses on both understanding financial instruments and applying related standards such as FRS 25, FRS 26, IAS 39, and IFRS 7.
