ICAI issues Guidance note on Accounting for Derivative Contracts
Guidance Note on Accounting for Derivative Contracts The Research Committee of ICAI issued the Guidance Note on Accounting for Derivative Contracts to establish uniform accounting principles for accounting of derivative contracts. In view of global developments in respect of Interbank Offered Rates (IBORs), the same has been revised. A report on “Reforming Major Interest Rate Benchmarks” was issued by the Financial Stability Board (FSB). Consequently, some major interest rate benchmarks will cease to be published across the globe after December 2021. The ongoing reform in IBORs, will impact the way financial information is accounted for in the financial statements. Therefore, Guidance Note has been revised primarily to address replacement issues relating to hedge accounting arising from Interest Rate Benchmark Reforms. The objective of this Guidance Note is to provide guidance on recognition, measurement, presentation and disclosure for derivative contracts so as to bring uniform...
