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CLASSIFICATION, EVALUATION
AND ACCOUNTING POSSIBILITIES
FOR DERIVATIVE FINANCIAL INSTRUMENTS
The undeniable interest of economic theory and practice towards financial derivatives makes them a current subject of analysis. The existence of derivatives raises the logical question about their purpose. If an investor participates in the distribution of a company’s profits by holding its shares, why do they apply another instrument that is ...
The undeniable interest of economic theory and practice towards financial derivatives makes them a current subject of analysis. The existence of derivatives raises the logical question about their purpose. If an investor participates in the distribution of a company’s profits by holding its shares, why do they apply another instrument that is related to owner’s equity? The derivative markets create favorable opportunities by improving the efficiency of the underlying assets markets. Derivatives have lower transaction costs compared to other transactions with basic instruments on the spot market, they are more liquid and the risk can be transferred into a more effective, simple and inexpensive way. Proof for the significance of derivative instruments is also the EU-accepted IFRS 9 Financial Instruments. Therefore, it is important that the management of every organization is aware of the regulatory framework for financial instruments, as well as the effects of each transaction with financial instrument.
The main purpose of the study is to define a classification of derivative instruments and to mark key points in their accounting. The specific objectives that have to be solved are to highlight the alternatives for classifying derivatives and to focus on their immediate current accounting. The thesis is that the adequate classification and evaluation of these instruments are important factors for their correct accounting. The main conclusion is that proper classification of derivatives has a practical significance because there has to be determined whether the instrument has a value at the beginning, which has a timely accounting impact. Their internal and time values have a significant role as well, because in the changes they must be clearly distinguished from the change in the fair value of the derivative itself.
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LEASE AGREEMENTS IN LESSEES’ FINANCIAL STATEMENTS ACCORDING TO IFRS 16 LEASES
A main requirement in financial statements is to faithfully present the information about their elements. This also applies to financial information regarding a lease. After the adoption of IFRS 16 Leases and its entry into force on January 1, 2019, it is of paramount importance to know and apply its requirements. The changes in this Standard ...
A main requirement in financial statements is to faithfully present the information about their elements. This also applies to financial information regarding a lease. After the adoption of IFRS 16 Leases and its entry into force on January 1, 2019, it is of paramount importance to know and apply its requirements. The changes in this Standard primarily concern the reporting of lease agreements and their presentation in the lessee’s financial statements.
The research objective is to present the main points when applying the IFRS 16 Leases in the lessee’s statements. To achieve the objective the following tasks have been set in the study: Clarifying the need for a new lease accounting standard, outlining the purpose and scope of the standard, establishing the right to lease agreement and distinguishing it from services, and its accounting and presentation in the lessee’s financial statements.
Studying and clarifying the main points of IFRS 16 Leases is related to the assumption that knowing them well is a prerequisite for their proper accounting and presentation in the financial statements and hence raising their credibility.
The results achieved in the course of the study are mainly of a practical nature and can be used when applying this new accounting standard in Bulgarian accounting practice.
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BALANCE SHEET ITEMS OF THE BULGARIAN NATIONAL BANK UNDER THE CONDITIONS
OF EU MEMBERSHIP
The research area of the survey is the balance sheet positions of the BNB, and the subject - the convergent aspects of the BNB balance sheet items for the period 01.2006 to 03.2018. The purpose of the survey is to identify the specifics, under the currency board conditions, as well as the dynamics, trend and risk parameters of the BNB balance ...
The research area of the survey is the balance sheet positions of the BNB, and the subject - the convergent aspects of the BNB balance sheet items for the period 01.2006 to 03.2018. The purpose of the survey is to identify the specifics, under the currency board conditions, as well as the dynamics, trend and risk parameters of the BNB balance sheet items, focusing on the currency risk of USD-denominated balance sheet positions and the correlation of these positions with the GDP of Bulgaria. A special focus is placed on currency risk in USD-denominated balance sheet items. The thesis tests the existence of a direct link between dynamics in the BNB balance sheet positions and the growth of GDP, taking into account force majeure factors. The paper has the following tasks: first, study the philosophy and the regulatory framework for the structure of the balance sheet items of the BNB; study trends and dynamics of the balance sheet positions of the BNB for the period 2006-2018; thirdly, the study of the currency risk system and its effect on the balance sheet positions of the BNB; the study of the correlation relations and the influence of the passives on the active positions in the balance sheet of the BNB. Analytical results confirm leadership "risk" status for the item "Cash and cash equivalents ..." (by 61.7% of the variation) in the asset and under "Liabilities to other depositors" the liability (61.7% variation). The final correlation analysis of the relationship between dynamics in capital and liabilities positions and their impact on asset positions places a leading role as a factor of position „Total Liabilities“. The impact of its dynamics is the strongest on „Investments in securities” with a positive correlation from +0.76 and determination coefficient equal to 57.9%.
