The Accounting for Financial Instruments and Its Effects Known for Businesses

Abstract

Nowadays, there are various kinds of financial instruments in financial markets to keep and to meet the requirements of financial executives such as equity instruments, fixed-income securities, derivatives, including the financial funds. Each type of instruments has different return characteristics and risks. In addition, the accounting is also more complicated. The objectives of this article are to know and inform about the accounting for financial instruments and to find out the effects that should be known for businesses in order to make the peaceful and happy society in a cashless society era.

Thus, the modern executives have to be omniscient and understand the financial documents, the accounting for financial instruments such as, 1) measurement of financial instruments, 2) recognition of loss from impairment of financial instruments, 3) the hedge accounting, 4) the listing for financial instruments, 5) classification of financial liabilities and capital of an enterprise, 6) payment of financial liabilities with equity securities, 7) data disclosure for financial instruments, and 8) the impact that should be known for business, as well as guidelines for preparing and Implementation of new rules.