1995 Fiscal Year Final Research Report Summary
Fundamental Research on accounting for new-fenancial instruments : Its recognition, measurement, and disclosure
| Project/Area Number |
05630088
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| Research Category |
Grant-in-Aid for General Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Research Field |
Accounting
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| Research Institution | Kobe University (1994-1995)
Ryukoku University (1993) |
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Principal Investigator |
KOGA Chitoshi School of Business Administration Kobe University, Prof., 経営学部, 教授 (70153509)
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| Project Period (FY) |
1993 – 1995
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| Keywords | New financial instrument / On-Balance-sheet accounting / Current market value / Hedge accounting / Disclosure of risk / Derivative / Economic substance / Evolutionary approach |
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| Research Abstract |
The objectives of this research are to review the various types of innovative financial activities that are undertaken by an enterprise, and to discuss what principles should govern the financial reporting of such activities, with particular emphasis on recognition, measurement and disclosure.
In this research, various issues of accounting for innovative financial activities with these new financial instruments are discussed. As the results of this research, the major findings are as follows :
(1) Most of the new financial instruments are treated as executory contracts, and theoretically they would meet the criteria of being recognized in the balance sheet.
(2) Market value accounting should be employed with the conventional historical cost accounting.
(3) More comprehensive disclosure should be encouraged to make the users take attention to the potential risks involved in the innovative financial instruments.
(4) Compound financial instruments should be treated separately as much as possible based on the "fundamental component approach".
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