Financial Instruments Implementation Guidance

Background and Related Information
Introduction
Index

Introduction

This Implementation Guidance has not been reviewed by the AcSB and is not a primary source of generally accepted accounting principles, as described in GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, Section 1100. However, it is a useful other source that an entity might consult to assist in selecting accounting policies. These documents are intended to clarify certain aspects of the standards. Nothing in these documents is to be taken as overriding the requirements of any primary sources of GAAP.

This guidance is structured as a series of documents with optional links. Both narrative and graphic representations of the material are included. The FIWG strongly encourages you to read the Handbook references provided. Terms used in the standards are highlighted in the guidance documents and presented with their definitions in alphabetical order in the glossary for your convenience.

The Financial Instruments Working Group (FIWG) has broken down the process for implementing the standards into the following steps:

1. Identify the contracts that are within the scope of the standards.
2. Classify these items.
3. Recognize them at inception and measure them using the appropriate model.
4. Apply the appropriate subsequent measurement model.
5. Recognize revenue and expenses, gains and losses, apply the appropriate presentation model and complete required disclosures.
6. Apply hedge accounting (optional).

Index

Glossary (PDF)

Implementation timeline (PDF)

Transition (PDF)

Step 1 — Identification (PDF)
     Step 1 process (PDF)
     Common assets and liabilities (PDF)
     Derivatives flowchart (PDF)
     Embedded derivatives (PDF)

Step 2 — Classification (PDF)
     Common assets and liabilities (PDF)

Step 3 — Recognition and initial measurement (PDF) 
     Related party transaction examples (PDF)

Step 4 — Subsequent measurement (PDF)
     Effective Interest Rate Method Example (PDF)
     Adjustments to Effective Interest Rate (PDF)
     Effective Interest Rate Method and Impairment (PDF)
     Interest-bearing Investment Classified as Available for Sale (PDF)
             or Held for Trading by a Not-for-Profit Organization (PDF)

Step 5 — Income recognition, presentation and disclosure (PDF)

Step 6 — Hedge accounting (PDF)
     Example — Assessing effectiveness for an interest (PDF)
           rate hedge (PDF)

Not-for-Profit Organization (PDF)
     Interest-bearing Investment Classified as Available for Sale (PDF)
           or Held for Trading by a Not-for-Profit Organization (PDF)