Derivative instrument - Revision history

Doug: Improve linking.

2025-09-26T14:38:20Z

Improve linking.

← Older revision		Revision as of 14:38, 26 September 2025
Line 86:		Line 86:
	* [[Hedge fund]]		* [[Hedge fund]]
	* [[Hedging]]		* [[Hedging]]
			* [[Hybrid]]
	* [[IFRS 9]]		* [[IFRS 9]]
	* [[Index]]		* [[Index]]

Doug: Add link.

2024-08-29T16:28:13Z

Add link.

← Older revision		Revision as of 16:28, 29 August 2024
Line 100:		Line 100:
	* [[Market value]]		* [[Market value]]
	* [[Maturity]]		* [[Maturity]]
			* [[Natural hedge]]
	* [[Notional principal]]		* [[Notional principal]]
	* [[Option]]		* [[Option]]
Line 124:		Line 125:
	*[http://www.treasurers.org/node/8599 Masterclass: Derivatives, ''Sarah Boyce,'' The Treasurer]		*[http://www.treasurers.org/node/8599 Masterclass: Derivatives, ''Sarah Boyce,'' The Treasurer]
	*[https://www.linkedin.com/pulse/renewable-energy-level-playing-field-out-reach-ifrs-ermelindo-kjn2e/?trackingId=BO5EmbY5RJeM1XLQAjDX1Q%3D%3D Renewable Energy: is a level playing field out of reach for IFRS preparers? - Ermelindo Varela R.A, AMCT, FRM - 25 June 2024]		*[https://www.linkedin.com/pulse/renewable-energy-level-playing-field-out-reach-ifrs-ermelindo-kjn2e/?trackingId=BO5EmbY5RJeM1XLQAjDX1Q%3D%3D Renewable Energy: is a level playing field out of reach for IFRS preparers? - Ermelindo Varela R.A, AMCT, FRM - 25 June 2024]

	~~[[Category:Manage_risks]]~~

	[[Category:Manage_risks]]		[[Category:Manage_risks]]

Doug: Add source of 2nd definition.

2024-06-26T09:01:49Z

Add source of 2nd definition.

← Older revision		Revision as of 09:01, 26 June 2024
Line 57:		Line 57:
	The consequence of this difference is that a larger number of contracts are classified as derivative instruments under IFRS 9, compared with US GAAP.		The consequence of this difference is that a larger number of contracts are classified as derivative instruments under IFRS 9, compared with US GAAP.

			''(Source Ermelindo Varela R.A, AMCT, FRM - Renewable Energy: is a level playing field out of reach for IFRS preparers? - 25 June 2024.)''


Line 120:		Line 121:


	==Other ~~resource~~==		==Other resources==
	*[http://www.treasurers.org/node/8599 Masterclass: Derivatives, ''Sarah Boyce,'' The Treasurer]		*[http://www.treasurers.org/node/8599 Masterclass: Derivatives, ''Sarah Boyce,'' The Treasurer]
			*[https://www.linkedin.com/pulse/renewable-energy-level-playing-field-out-reach-ifrs-ermelindo-kjn2e/?trackingId=BO5EmbY5RJeM1XLQAjDX1Q%3D%3D Renewable Energy: is a level playing field out of reach for IFRS preparers? - Ermelindo Varela R.A, AMCT, FRM - 25 June 2024]

			[[Category:Manage_risks]]

	[[Category:Manage_risks]]		[[Category:Manage_risks]]

Doug: Expand 2nd definition.

2024-06-25T11:58:56Z

Expand 2nd definition.

← Older revision		Revision as of 11:58, 25 June 2024
Line 50:		Line 50:
	:(3) it is settled at a future date.		:(3) it is settled at a future date.


			There are a number of technical differences between the identification of derivative instruments under US GAAP, compared with IFRS.

	The most important difference between IFRS 9 and US GAAP is that, to be characterised as a derivative instrument under US GAAP, the contract must generally reference a notional principal amount.		The most important difference between IFRS 9 and US GAAP is that, to be characterised as a derivative instrument under US GAAP, the contract must generally reference a notional principal amount.

Doug: Expand 2nd definition.

2024-06-25T11:57:24Z

Expand 2nd definition.

← Older revision		Revision as of 11:57, 25 June 2024
Line 35:		Line 35:

	2. ''Financial reporting - IFRS 9 - US GAAP.''		2. ''Financial reporting - IFRS 9 - US GAAP.''

			Contracts defined as derivative instruments must normally be "fair valued" at each financial reporting end date.

			This can lead to greater volatility in reported corporate profits (earnings).

			The greater the number of contracts that are categorised as derivative instruments, the greater the potential for increased volatility in reported profits.


	Under International Financial Reporting Standards (IFRS) a derivative is a financial instrument or other contract with all three of the following characteristics:		Under International Financial Reporting Standards (IFRS) a derivative is a financial instrument or other contract with all three of the following characteristics:

Doug: Layout.

2024-06-24T23:47:07Z

Layout.

← Older revision		Revision as of 23:47, 24 June 2024
Line 37:		Line 37:

	Under International Financial Reporting Standards (IFRS) a derivative is a financial instrument or other contract with all three of the following characteristics:		Under International Financial Reporting Standards (IFRS) a derivative is a financial instrument or other contract with all three of the following characteristics:
	: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 (sometimes called the ‘underlying’).		:(1) 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 (sometimes called the ‘underlying’).
	: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.		:(2) 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.

			:(3) it is settled at a future date.


Line 95:		Line 97:
	* [[Risk management]]		* [[Risk management]]
	* [[Rogue trader]]		* [[Rogue trader]]
			* [[Settlement]]
	* [[Strike price]]		* [[Strike price]]
	* [[Swap]]		* [[Swap]]

Doug: Add definition - source - IFRS 9.

2024-06-24T23:46:09Z

Add definition - source - IFRS 9.

← Older revision		Revision as of 23:46, 24 June 2024
Line 1:		Line 1:
	''Risk management - hedging''.		1. ''Risk management - hedging''.

	A derivative instrument or contract is one whose value and other characteristics are derived from those of another asset or instrument (sometimes known as the Underlying Asset).		A derivative instrument or contract is one whose value and other characteristics are derived from those of another asset or instrument (sometimes known as the Underlying Asset).
Line 32:		Line 32:

	The value of the option is being driven by - among other things - the share price.		The value of the option is being driven by - among other things - the share price.


			2. ''Financial reporting - IFRS 9 - US GAAP.''

			Under International Financial Reporting Standards (IFRS) a derivative is a financial instrument or other contract with all three of the following characteristics:
			: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 (sometimes called the ‘underlying’).
			: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.


			The most important difference between IFRS 9 and US GAAP is that, to be characterised as a derivative instrument under US GAAP, the contract must generally reference a notional principal amount.

			The consequence of this difference is that a larger number of contracts are classified as derivative instruments under IFRS 9, compared with US GAAP.



Line 40:		Line 54:
	* [[Commercial paper]] (CP)		* [[Commercial paper]] (CP)
	* [[Commodity risk]]		* [[Commodity risk]]
			* [[Contract]]
	* [[CPI fixing swap]]		* [[CPI fixing swap]]
			* [[Credit rating]]
	* [[Credit support annex]]		* [[Credit support annex]]
			* [[Derivative]]
	* [[Embedded derivative]]		* [[Embedded derivative]]
	* [[ETD]]		* [[ETD]]
Line 47:		Line 64:
	* [[FC]]		* [[FC]]
	* [[Financial instrument]]		* [[Financial instrument]]
			* [[Financial reporting]]
	* [[Fixing instrument]]		* [[Fixing instrument]]
			* [[Foreign exchange rate]]
	* [[Forward contract]]		* [[Forward contract]]
	* [[Forward rate agreement]]		* [[Forward rate agreement]]
Line 55:		Line 74:
	* [[Hedge fund]]		* [[Hedge fund]]
	* [[Hedging]]		* [[Hedging]]
			* [[IFRS 9]]
			* [[Index]]
			* [[Interest rate]]
	* [[Interest rate derivative]]		* [[Interest rate derivative]]
	* [[Interest rate swap]]		* [[Interest rate swap]]
			* [[International Financial Reporting Standards]] (IFRS)
			* [[Investment]]
	* [[ISDA Master Agreement]]		* [[ISDA Master Agreement]]
	*[[Legal Entity Identifier Regulatory Oversight Committee]] (LEI ROC)		*[[Legal Entity Identifier Regulatory Oversight Committee]] (LEI ROC)
Line 62:		Line 86:
	* [[Margining]]		* [[Margining]]
	* [[Mark to market]]		* [[Mark to market]]
			* [[Market value]]
	* [[Maturity]]		* [[Maturity]]
	* [[Notional principal]]		* [[Notional principal]]
Line 77:		Line 102:
	* [[Underlying asset]]		* [[Underlying asset]]
	* [[Underlying price]]		* [[Underlying price]]
			* [[US GAAP]]
			* [[Value]]
			* [[Variable]]
	* [[X-Value Adjustment]] (XVA)		* [[X-Value Adjustment]] (XVA)

Doug: Add link.

2023-11-20T19:30:51Z

Add link.

← Older revision		Revision as of 19:30, 20 November 2023
Line 58:		Line 58:
	* [[Interest rate swap]]		* [[Interest rate swap]]
	* [[ISDA Master Agreement]]		* [[ISDA Master Agreement]]
			*[[Legal Entity Identifier Regulatory Oversight Committee]] (LEI ROC)
	* [[Leverage]]		* [[Leverage]]
	* [[Margining]]		* [[Margining]]

imported>Doug Williamson: Add links.

2023-06-22T08:08:51Z

Add links.

← Older revision		Revision as of 08:08, 22 June 2023
Line 40:		Line 40:
	* [[Commercial paper]] (CP)		* [[Commercial paper]] (CP)
	* [[Commodity risk]]		* [[Commodity risk]]
			* [[CPI fixing swap]]
	* [[Credit support annex]]		* [[Credit support annex]]
	* [[Embedded derivative]]		* [[Embedded derivative]]
Line 69:		Line 70:
	* [[Rogue trader]]		* [[Rogue trader]]
	* [[Strike price]]		* [[Strike price]]
			* [[Swap]]
	* [[Tracker fund]]		* [[Tracker fund]]
	* [[Transfer]]		* [[Transfer]]

imported>Doug Williamson: Add link.

2023-04-30T20:15:06Z

Add link.

← Older revision		Revision as of 20:15, 30 April 2023
Line 45:		Line 45:
	* [[Expiry date]]		* [[Expiry date]]
	* [[FC]]		* [[FC]]
			* [[Financial instrument]]
	* [[Fixing instrument]]		* [[Fixing instrument]]
	* [[Forward contract]]		* [[Forward contract]]