What is a derivative in accounting?
Derivatives are financial contracts, set between two or more parties, that derive their value from an underlying asset, group of assets, or benchmark. A derivative can trade on an exchange or over-the-counter. Prices for derivatives derive from fluctuations in the underlying asset.
What is a non financial variable?
Thus the EBITDA of a party to a contract is considered to be a non-financial variable specific to a party to a contract. Sales revenue, like EBITDA, is a non-financial variable specific to a party to the contract. However, the price of entity A’s shares is a financial variable.
What are non-derivative financial assets?
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They typically arise when an entity provides money, goods or services directly to a debtor with no intention of trading the receivable. This category excludes loans and receivables.
What is non-derivative host contract?
An embedded non-option derivative (such as an embedded forward or swap) is separated from its host contract on the basis of its stated or implied substantive terms, so as to result in it having a fair value of zero at initial recognition (IFRS 9. B4. 3.3).
What is a stand-alone derivative?
Embedded derivatives that are not ‘closely related’ to the host contract are separated and accounted for as stand-alone derivatives (that is, measured at fair value, with changes in fair value recognised in profit or loss).
What does non derivative mean?
nonderivative. noun. Definition of nonderivative (Entry 2 of 2) : something that is not a derivative The fixed income maturity group spans all types of loans, but also cash and corporate bonds, time deposits, mortgages and all traded nonderivatives.
What is the difference between P&L and OCI?
It is a myth, and simply incorrect, to state that only realised gains are included in the statement of profit or loss (SOPL) and that only unrealised gains and losses are included in the OCI….
| $m | |
|---|---|
| Profit for the year | XX |
| Other comprehensive income | |
| Gains and losses that cannot be reclassified back to profit or loss |
What does non-derivative mean?