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Financial Instruments:
Recognition and Measurement
Limited Revisions to
AS 2,
AS 11 (revised 2003),
AS 21,
AS 23,
AS 26,
AS 27
AS 28
AS 29
OBJECTIVE
Recognising and measuring financial
assets, financial liabilities and some
contracts to buy or sell non-financial
items.
Requirements for presenting
information about financial
instruments
DEFENITIONS
Derivative
(a) its value changes in response to the change
in a specified interest rate, financial instrument
price, commodity price, foreign exchange rate,
index of prices or rates, credit rating or credit
index, or other variable, provided in the case of a
non-financial variable that the variable is not
specific to a party to the contract
(b) it requires no initial net investment or an
initial net investment that is smaller than would
be required for other types of contracts that
would be expected to have a similar response to
changes in market factors
(c) it is settled at a future date.
RECOGNITION
Three conditions.
currency swaps
Contracts to buy or sell non-financial
items do not meet the definition of a
financial instrument because the
contractual right of one party to
receive a non-financial asset or service
and the corresponding obligation of the
other party do not establish a present
right or obligation of either party to
receive, deliver or exchange a financial
asset
Presentation