Guidance Note on Accounting for Derivative Contracts (Revised 2021)
July, 07th 2021
The Research Committee of ICAI issued the Guidance Note on Accounting for Derivative Contracts to establish uniform accounting principles for accounting of derivative contracts. In view of global developments in respect of Interbank Offered Rates (IBORs), the same has been revised. A report on “Reforming Major Interest Rate Benchmarks” was issued by Financial Stability Board (FSB). Consequently, some major interest rate benchmarks will cease to be published across the globe after December 2021. The ongoing reform in IBORs, will impact the way financial information is accounted for in the financial statements. Therefore, Guidance Note has been revised primarily to address replacement issues relating to hedge accounting arising from Interest Rate Benchmark Reform.
I congratulate the Accounting Standards Board in taking this initiative and coming out with revised Guidance Note
I appreciate CA. M P Vijay Kumar, Chairman, Accounting Standards Board and CA. (Dr.) Sanjeev Singhal, Vice-Chairman, Accounting Standards Board and all members of the Accounting Standards Board including other colleagues in the Council who have contributed immensely towards bringing out this publication.
I am confident that this Guidance Note would be of immense use to the professionals and other stakeholders for fulfilling their financial reporting requiirements.