Cross-currency interest rate swap and Current cost accounting: Difference between pages

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(CCIRS). A longer term derivative contract which is used to transform longer term interest rate-related obligations or assets in one currency, into another currency. 
''Financial reporting.''


For example, a GBP-based firm with a USD borrowing might use a CCIRS to transform the USD borrowing into a synthetic GBP borrowing.
A basis of valuation in published financial statements drawing mainly on replacement cost accounting techniques, but also on net realisable values and economic values.


The concept of a CCIRS was developed from the (same-currency) interest rate swap market, which most commonly swaps fixed and floating interest rate streams in the same currency.
Its purpose was to adjust for the effects of inflation on the historic costs of balance sheet items by bringing all items within the accounts to present day values.
 
Same currency interest rate swaps exchange interest flows in the same currency (but calculated on different bases).
Cross currency interest rate swaps exchange interest flows denominated in different currencies.
Cross currency interest rate swaps usually exchange currency principal amounts at their maturity (unlike same-currency interest rate swaps).
 
Also known as Currency interest rate swap or Foreign currency swap.


== See also ==
== See also ==
* [[Asset-based swap]]
* [[Historical cost accounting]]
* [[Currency risk]]
* [[Currency swap]]
* [[GBP]]
* [[Interest rate swap]]
* [[Swap]]
* [[Synthetic]]
* [[USD]]
 

Revision as of 13:02, 5 August 2013

Financial reporting.

A basis of valuation in published financial statements drawing mainly on replacement cost accounting techniques, but also on net realisable values and economic values.

Its purpose was to adjust for the effects of inflation on the historic costs of balance sheet items by bringing all items within the accounts to present day values.

See also

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