Recognizing and Measuring Financial Instruments
T he International Accounting Standards Committee (IASC) issued a discussion paper on the recognition and measurement of financial instruments. Accounting for Financial Assets and Financial Liabilities provides a comprehensive analysis of the major issues associated with accounting for transfers of financial assets, debt defeasance transactions and hedge accounting.
By 1994, the IASC had issued two exposure drafts—E40 and E48, both
titled Financial Instruments —and it approved International
Accounting Standard (IAS) no. 32, Financial Instruments:
Disclosure and Presentation , in 1995. This discussion paper is
based on the comments from both IASC exposure drafts and input from
members of the IASC and Canadian Institute of Chartered Accountants
(CICA) advisory committees and boards of directors. "Other
standard setting bodies, such as the Financial Accounting Standards
Board, were committing more research to the recognition and
measurement of these instruments," said Ian Hague, senior manager
of the CICA. "The IASC developed this discussion paper in
response to recent, fundamental changes in the variety and
sophistication of financial instruments."