Financial instrument accounting research

Author: Li Ronglin
Publisher:
Publish Date: 2004-03-01
Features: This book is an excellent monograph with a novel title, rich content, profound analysis, comprehensiveness, and unique insights from the author. It has three characteristics:
1. Novel topic, high difficulty. In the past two to three decades, as countries have relaxed bank management and interest rate controls, and shifted exchange rates from fixed to floating, the financial industry has faced unprecedented risks, leading to a series of financial innovations to mitigate these risks. The main consequence is the emergence of a large number of derivative financial instruments. Derivatives differ from underlying instruments as they are based on a series of variables but offer the potential for high-risk, high-reward outcomes. How to disclose derivatives in financial accounting, particularly their recognition and measurement, has become a key research topic for the International Accounting Standards Committee and some developed countries.
2. Systematic and comprehensive, with rich content. The direct literature available for reference in this paper mainly includes SFAS 133 and related SFAS 105, SFAS 104, SFAS 105, SFAS 119, as well as IAS 39, IAS 32, ED 40, and ED 48. However, the author has written a monograph of over 100,000 words in a systematic, comprehensive, and quite profound manner. The paper covers the fundamental theories of financial instruments, derivatives, financial accounting, and financial reporting, as well as the main procedures and methods of recognition, measurement, and reporting. This is no easy task.
3. Original and unique insights in many aspects: , the author has independently created a research system for financial instrument accounting. Second, in the recognition of derivatives, for the initial recognition of financial assets and financial liabilities, the author analyzes the risk-reward method and the initial recognition standards proposed by IASC in ED 62—when an enterprise becomes, and remains only, a party to a financial instrument as a contract, financial assets or liabilities can be recognized. The author strongly endorses this approach, which also demonstrates his unique insights on the recognition of financial instruments. Third, the book provides an in-depth analysis of the derecognition of financial instruments. Fourth, throughout the book, the author consistently advocates the use of fair value as the measurement attribute for financial assets and financial liabilities.