The Study Of Accounting Information Disclosure Of Financial Swaps

As one kind of the .derivative financial instruments, financial swap is used extensively. That's because it has the function of avoiding risk effectively, doing the asset and debt management, lowering the cost of money-collection and exploiting the channel of money-collection. For the realization of "decision-making useful" accounting objective, it is important to fully reveal the risk of financial swaps and provide decision-making related information to accounting information users, which also makes the research for the disclosure of accounting information of financial swap very important too. Looking at the state of the disclosure of accounting information did by the commercial banks listed,we can find that from 2005 to 2006, the banks made great breakthroughs in financial swap accounting,which mainly contains the form accounting and adopting the fair value measurement. But there are still many problems,such as the initial recognised value is fuzzy and the accounting subjects of financial swap are disordered and he fair value method is not clear and information can not be disclosed fully in notes and so on. To solve the above problems,we use the United States and the international derivatives accounting standards for reference, and combined with China's new financial instruments accounting standards,the accounting recognition, measurement, recording and reporting of currency swap and interest rate swap are discussed through examples.We think the currency swap and interest rate swap should be recognized when they entered the contracts. Currency swap should be accounted by the principal amount of exchange, while the interest rate swap be recorded by the discounted value of the interest-recorded.Then the follow-up measurement is conducted by fair value and it should be re-assessed in every end of the accounting period. The matrix pricing method, option pricing law and the present value are often used to Estimate the fair value.Through comparative analysis among the several methods,we think Discounted-cash-flow method is most appropriate to obtain the fair value.That's because the swap itself is the next interest-exchange contract,and it is in line with China's market status and the quality of financial person.The report of the financial swap contains the form disclosure and notes. The balance sheet, income statement and cash flow statement are included in form disclosure,while the financial information in notes should be specific and further improved on the base of the banks' generally disclosure status.The deed that corresponding value is recorded in the accounts when the interest rate swap contract is signed and using discounted cash flow method to calculate fair value and disclosed them in detail solved the the difficulties in financial swap accounting and it is conducive to the risk of disclosure on swaps.The whole process of currency swap and interest rate swap accounting and disclosure provide a practical application for thinking ideas of our financial instruments accounting standards.