First, the meaning and characteristics of derivative financial instruments

International Accounting Standard No.39 Financial Instruments: Recognition and Measurement (IAS-NO.39) issued by International Accounting Standards Committee (IASC) 1999 defines derivative financial instruments as follows: Derivative financial instruments refer to financial instruments with the following characteristics:

(1) Its value changes with the change of specific interest rate, securities price, commodity price, foreign exchange rate price, credit rating of exchange rate index, credit index or similar variables;

② Compared with other types of contracts with similar market conditions, it requires less initial net investment;

Determine a future date. According to their respective trading methods and characteristics, derivative financial instruments can be divided into four categories: forward contracts, financial futures, financial options and swaps. Trading in derivative financial instruments will make the engaged entity directly or indirectly own the assets or liabilities related to it. This is a kind of "financial asset" and "financial liability" with different characteristics from traditional assets and liabilities. Generally speaking, derivative financial instruments have the following characteristics:

1. leverage.

Leverage in financial theory refers to the operation mode of obtaining more investment with less capital cost, thus improving income. Derivative financial instruments are based on the price of the underlying instruments. When trading, it is not necessary to pay the full value of the related assets. As long as a certain percentage of margin or margin is paid, the related assets can be managed and operated. Therefore, traders can take advantage of the differences in different market prices to buy from the low-priced market and sell at the high-priced market, thus making a profit. Although there is a trend of global integration in the international financial market, the price difference between the markets is very small, but because of the huge turnover of derivative financial instruments, arbitrageurs and speculators still have considerable profits. The emergence of speculators not only enlivens the derivative financial market, but also disrupts the international financial market to some extent.

2. The value fluctuates strongly.

In the traditional sense, the value of assets depends on the amount of socially necessary labor, which is relatively stable, and the price fluctuates around the value with little amplitude. However, the financial assets in derivative financial instruments transactions are completely different and have strong value volatility. When derivative financial instruments can significantly reduce the risk of basic instruments, their value will also increase accordingly; On the contrary, if derivative financial instruments can no longer reduce risks or bring any profits, they are worthless. Furthermore, when it can't bring any profits but may lead to huge losses, its value is the corresponding "negative number", which assets and liabilities in the traditional sense do not have.

3. The risk is extremely high.

The direct cause of derivative financial instruments is that enterprises require "avoiding risks", and risks are inseparable from derivative financial instruments. Properly operated derivative financial instruments can minimize the risk of basic instruments. On the contrary, derivative financial instruments will maximize the risk of enterprises. The vagaries of the market and the excessive speculation of traders have made many people gain huge profits, and also made many participants suffer losses and even go bankrupt. According to the joint report of the Basel Committee on Banking, the main risks involved in derivative financial instruments are: market risk, credit risk, liquidity risk, operational risk, settlement risk and legal risk.

4. virtuality.

Fictitiousness refers to the characteristics that securities are independent of real capital, but can bring certain benefits to securities holders. The virtual nature of derivative financial instruments makes most of their transactions not constitute the assets and liabilities of relevant financial institutions, but become off-balance-sheet business. Because most derivative financial instruments are not listed in the balance sheet, especially in the trend that derivative financial instruments account for an increasing proportion of the whole financial business, financial institutions seek a large number of off-balance sheet businesses in order to improve the asset-liability structure and increase the rate of return on assets, thus expanding the capital base of banks and expanding their profitability.

Second, the impact of derivative financial instruments on the current financial accounting theory

In recent years, the recognition, measurement and reporting of financial instruments have been puzzling the accounting field, and the appearance and rapid development of derivative financial instruments have aggravated this situation, making traditional financial accounting face new challenges in its accounting treatment.

1. The influence of basic concepts of financial accounting.

The current definitions of basic accounting concepts such as "assets" and "liabilities" are based on the results of past transactions or events, and it is expected that future transactions or events will not form assets or liabilities themselves. One of the characteristics of financial instruments, especially derivative financial instruments, is that the transaction embodied in the contract has not happened now, but will happen in the future. If derivative financial instruments are listed as enterprise assets, the traditional concept of "assets" must be changed. Similarly, if derivative financial instruments are classified as "liabilities", it is only possible to convert contingent liabilities into current liabilities, or such contingent liabilities can never be converted into current liabilities, which is difficult to generalize in the traditional sense. "Financial assets" and "financial liabilities" come from contracts signed by both parties, which are essentially different from traditional assets and liabilities. According to the traditional accounting model, it is impossible to form enterprise assets or liabilities by signing contracts. The appearance of derivative financial instruments has questioned the basic concepts of traditional financial accounting.

2. Accrual system and the influence of realization principle.

The recognition standard of financial accounting is based on accrual basis, and the income required to be recognized must be realized. According to the accrual basis, when an enterprise receives or pays cash, it does not record the impact of economic business on the enterprise, but records the impact on the enterprise during the occurrence of economic business. Realization principle means that an enterprise entity has completed the process of obtaining income, and at the same time has received the payment for goods or has the right to collect the payment for goods, so the entity can confirm this income. It can be seen that both accrual basis and cash basis are based on transactions or events that have occurred in the past, and future transactions and events will not be confirmed. The occurrence of derivative financial instruments indicates a series of financial changes in the future, which cannot be reflected in traditional financial reports, making the accounting information provided by financial reports incomplete or even false, thus generating unpredictable risks.

3. The influence of accounting measurement principles.

Traditional accounting measurement is based on historical cost. However, the historical cost principle only confirms the trading activities and the data it sends out, and a lot of financial information is not reflected, which will make the asset valuation based on the historical cost accounting measurement model seriously divorced from reality, and the scientific nature of traditional accounting theory and the reliability of accounting information will face severe challenges. Because the derivative financial instrument transaction can't be completed at one time like the traditional transaction, but it takes a period of time and a process, and this process can't be treated as two transactions alone like the traditional transaction (for example, the purchase of fixed assets and the final scrapping of fixed assets in the traditional transaction can be treated as two transactions). Any change in derivative financial instruments during their holding period is intrinsically linked and inseparable. There is no independent transaction of derivative financial instruments from valuable to low value or even worthless, but the result is quite objective. To reflect the authenticity of major economic activities, it is necessary to truly reflect the value of derivative financial instruments held by enterprises in stages. This is bound to break the original historical cost principle of financial accounting and replace it with fair value. The appearance of fair value makes the historical cost principle impossible and should not be the only measurement attribute of financial accounting, and the future development trend of financial accounting measurement attribute should be the long-term coexistence of historical cost and fair value.

4. The impact of financial reports.

The goal of financial accounting confirmation, recording and measurement is to provide reasonable and true financial reports to the outside world. The core of financial reporting system is accounting statement. Balance sheet, income statement and cash flow statement become the main body of financial report. Existing or potential information users obtain useful information for decision-making through financial reports. However, most derivative financial instruments transactions are off-balance-sheet businesses, and the transactions themselves cannot be reflected. People can't directly understand the financial transactions and risks faced by enterprises from financial reports, which makes the risks of financial markets and enterprises more unpredictable.

Third, the accounting treatment of derivative financial instruments

1. Confirmation of derivative products.

There are two problems to be solved in the recognition of derivative financial instruments: first, whether the rights or obligations represented by derivative financial instruments should be recognized as on-balance-sheet items (assets or liabilities) before the maturity date; Second, whether the changes in the fair value of derivative financial instruments should be recognized as profit or loss on the financial reporting date. Derivative financial instruments are different from general contracts and are irrevocable under non-specific conditions. Once the contract comes into effect, the relationship between creditor's rights and debts is established, and the corresponding transactions coexisting with risks are substantially transferred. Moreover, derivative financial instruments are a high-yield and high-risk trading method. From the conclusion of the contract to the performance, the value changes greatly. If it is confirmed during the performance of the contract that accounting information lacks high-risk and high-yield information generated by derivative financial instruments, the relevance of the whole accounting information will decline, which cannot meet the requirements of information users and cannot be realized. " Therefore, the author believes that under the condition of derivative financial instruments, we should follow the principle of relevance, take "substantial transfer of risk and reward" as the basis of accounting recognition, start from the conclusion of the contract and the substantial transfer of risk and reward, change the value in the holding process, and reflect the whole process of contract conclusion, holding and performance.

2. Measurement of derivative financial instruments.

The measurement of derivative financial instruments is the core and difficulty of derivative financial instruments accounting, and the accounting community has not yet reached a consensus on this issue. The crux of the problem is that derivative financial instruments, as a high-risk hedging tool, have great uncertainty. For this uncertainty, what measurement mode and how to measure it will not only affect the recognition of derivative financial instruments, but also affect the information disclosure of derivative financial instruments in accounting statements.

International Accounting Standard No.39 stipulates the initial measurement and subsequent measurement of financial assets and financial liabilities respectively. The provisions of initial measurement are as follows: when financial assets and financial liabilities are initially recognized, the enterprise shall measure them according to the cost. As far as financial assets are concerned, cost refers to the fair value of giving up consideration; As far as financial liabilities are concerned, cost refers to the fair value of the consideration received. Provisions for subsequent measurement are as follows: After initial recognition, financial assets are divided into four categories, namely:

(1) Loans and receivables initiated by enterprises but not held for transactions;

② Investment from holding date to maturity date;

③ Available-for-sale financial assets.

(4) Financial assets held for trading.

Among them, the financial assets of Class ① and Class ② are measured in amortized cost by the effective interest rate method after initial recognition; The other two types of financial assets shall be measured at fair value after initial recognition, without deducting the transaction costs that may occur during the sale or other disposal. In addition, the financial assets designated as hedging items shall be subsequently measured in accordance with the relevant provisions of hedging accounting; Financial assets that are not priced in an active market and whose fair value cannot be reliably measured shall be estimated and measured in accordance with relevant regulations.

For the subsequent measurement of derivative financial instruments, international accounting standards require fair value as its basic measurement attribute. The advantage of fair value is that it can provide more relevant and understandable information than traditional historical cost. The specific valuation method of fair value is the key to the measurement of derivative financial instruments. Among thousands of derivative financial instruments in the international financial market, only a few are widely circulated in the market, and most of them are specially designed for a few customers, suitable for specific purposes and not widely circulated. For these derivative financial instruments, the present value of future cash flow is the best way of fair value, while for derivative financial instruments with developed market, the market price provides the best reference for fair value.

3. Disclosure of derivative financial instruments.

Before 1990s, although derivative financial instruments were widely used as hedging or speculative tools, they were not recognized as assets or liabilities of holding or issuing enterprises, and were not listed in accounting statements, but only explained in the notes to accounting statements. The disclosure method in this note is usually rough, which is not suitable for the high-yield and high-risk characteristics of derivative financial instruments. Since IASC has solved the problem of the recognition of derivative financial instruments in its latest standards, the financial assets and financial liabilities generated by IASC should be listed in the table. The contents of the demonstration include:

The contract amount. Confirmed by the buyer and the seller as financial assets and financial liabilities respectively.

② The amount of margin paid and the amount of option fee paid are recognized as the financial assets of the enterprise.

③ The fair value of the above financial assets and financial liabilities on the financial reporting date. The structure of derivative financial instruments is complex, which cannot reflect all the information in the table, especially the risks faced by derivative financial instruments. Therefore, the off-balance-sheet disclosure of derivative financial instruments should be strengthened at the same time, and the off-balance-sheet disclosure should at least include the following parts:

First, the special contract terms not listed in the attached table include the purpose, category and nature of derivative financial instrument transactions. This is an important factor affecting the amount, time and certainty of future cash flow of derivative financial instruments.

Secondly, the accounting methods and policies adopted in accounting include the time standard of initial recognition and termination recognition of derivative financial instruments. Taking this as the source of measuring the fair value attribute, we can confirm and measure the basis and reasons for the profit and loss of derivative financial instruments.

Thirdly, the risks related to derivative financial instruments include interest rate risk, exchange rate risk, credit risk and circulation risk.

Fourth, the forecast information of market price. For derivative financial instruments held on the financial reporting date, the possible changes in their future market value and the impact on enterprises should be prompted.