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OBJECTIVES
This course will enable participants to understand how financial assets, liabilities, derivative instruments, equity instruments, debt instruments, hybrid instruments and complex products should be accounted.
It will bring out the areas where fair valuation is a must, where fair valuation is optional and where the accountant can continue with simple cost and/or amortized cost. The course will address accounting of derivative instruments and hedge accounting. It will
Cover various types of hedges and accounting nuances of each type.
BACKGROUND:
AS 30, 31 and 32 are complex standards which will govern accounting of financial instruments
and derivatives for all corporate (regardless of whether IFRS applies to them or not) from April 2011. These standards require clarity of concepts on fair value, discounting and basic
understanding of derivatives. In the context, a two days program on Accounting for Financial Instruments and Derivatives has been designed by the BSE Training Institute
PROGRAM CONTENTS
Day 1
- Financial Instruments, Financial Assets and Financial Liabilities
- Cost , Amortized Cost, Fair value
- Definition of Derivatives, Accounting for Derivatives
- Designation at Fair Value by Management
· Hedge accounting, Types of Hedges
· Rationale of each type of hedge, Hedge Effectiveness, Concept, Framework,
· Risk Management Policy
Day 2
Case Study 1: Accounting for an FX future contract entered by an Indian export firm
Case Study 2: Accounting for a currency future contract by an import firm and accounting in special cases, popular in Indian conditions like
o Utilization of a forward contract
o Early delivery of a forward contract
o Roll-over of a forward contract
Case Study 3: Accounting for NIFTY future contract entered by an institutional investor
Case Study 4: Accounting for an interest rate future contract entered by a Primary Dealer
Review of the new AS-30 regulations
· Definition of Hedge Items and Hedging Instruments and designation rules
· Hedge Accounting categories – Undesignated, Cash flow, Fair value and Net Investment Hedge
· Concept of a hypothetical derivative
· Hedge effectiveness tests – Critical terms, Dollar Offset, Regression, Variance Reduction
· Hedge relation termination events
· Case studies related to a Currency forward previously handled under the new standard
· Future challenges and opportunities under the new standard
Case Study 5: An exporter hedging his foreign currency exposure using a plain vanilla option; here we look at the concept of intrinsic and time value accounting, how to perform effectiveness testing & corresponding accounting entries
Case Study 6: A foreign currency borrowing hedged using an interest rate swap for offsetting the interest rate risk
Future challenges and opportunities under the new standard
Participants attending the entire course shall be eligible to receive Participation Certificate from the BSE Training Institute
TARGET AUDIENCE
Accounting professionals, Finance professionals, Treasury managers, Auditors, Consultants, Derivative operation practitioners, Officials from Banks, Importers & Exporters, CA’s
DURATION & TIMINGS
2 Days
9:30 to 5:30
FEES
Rs. 7000/- + 10.30% (Service Tax + Education Cess) per participant inclusive of course material, tuition fees, Computer, snacks and lunch.
PROGRAMME COORDINATOR
Nadeem Alam
For further details regarding contents, Contact:
Phone: 022 - 2272 8303, 6136 3155
E-mail: training@bseindia.com
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