derivative financial instruments

Article ID: 1928
Last updated: 14 Feb, 2022

Financial instruments such as financial options, futures and forwards, interest rate swaps and currency swaps, which create rights and obligations that have the effect of transferring between the parties to the instrument one or more of the financial risks inherent in an underlying primary financial instrument. On inception, derivative financial instruments give one party a contractual right to exchange financial assets or financial liabilities with another party under conditions that are potentially favourable, or a contractual obligation to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable. However, they generally do not result in a transfer of the underlying primary financial instrument on inception of the contract, nor does such a transfer necessarily take place on maturity of the contract. Some instruments embody both a right and an obligation to make an exchange. Because the terms of the exchange are determined on inception of the derivative instrument, as prices in financial markets change those terms may become either favourable or unfavourable.

(According to International Accounting Standards IAS 32)

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Article ID: 1928
Last updated: 14 Feb, 2022
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Ngày đăng: 14 Feb, 2022 by Nguyễn Chinh - Công ty Tâm An
Ngày cập nhật: 14 Feb, 2022 by Nguyễn Chinh - Công ty Tâm An
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