Research On Hedge Accounting Standard Problems

Hedge accounting has always been the most complex standard of all in making and executing and has been more and more important as the derivatives developing fast and hedge operations growing rapidly due to the risk management needs of enterprises. After the global financial crisis in 2008, the revise of hedge accounting standard has become a hot spot. Even though, the derivative market in China is still under developed, and hedging operations is rarely seen in Chinese companies. China has its own hedge accounting standard, but it is rarely applied and has similar problems such as difficult to apply and range of application is narrow. America is the first country to issue hedge accounting standard, and the international accounting standard committee (IASB)'s hedge accounting standard now has the greatest influence in the world, moreover, the hedge accounting standards of the two has the relationship of reference and cooperation, so this article mainly discuss the evolution of the hedge accounting standard of financial accounting standard board (FASB) and IASB, and try to explain it with Game Theory and case study. Then we will update their movement in the hedge accounting standard and make some suggestions on the hedge accounting standard construction in China.Firstly, we analyzed and emphasized the necessity of hedge accounting from the aspect of accounting and usefulness of information. Then we analyzed the origin and development of the hedge accounting, and think that hedge accounting standard origins from derivative accounting standard, and is the supplement and special circumstance of the derivative accounting standard. Secondly, we briefly introduced all relative standards and files which issued by the FASB and IASB, paving a way for the following research. Thirdly, we summarized and analyzed the basics and evolution of the three aspects of hedge accounting standard, including hedge relationship designation, accounting and disclosure, and summarized the latest progress of FASB and IASB in revising the hedge accounting standard after the 2008 financial crises. Lastly, we analyzed the evolution with the Game Theory and conclude that the trend of hedge accounting is to be simplified, and the main trend of hedge accounting standard is providing principle guidance only. Together with the history and states quo of hedge accounting standard in China, According to those research above, we conclude that we still in a poor lever of hedge market and hedge accounting standard development, so we must strengthen the concrete guidance, technical training and moral education in the same time in order to grantee the execute of hedge accounting standard of China.