Commodity Risk - Moore Stephens商品风险-穆尔斯蒂芬斯.ppt

* * * * * Thank you. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Embedding Commodity Risk Management (cont’d) A) Derivatives Derivatives without physical delivery of the underlying commodity are within the scope of International Accounting Standard (IAS) 39. Derivatives are recorded at fair value within changes in fair value recorded in income irrespectively. Embedding Commodity Risk Management (cont’d) A) Derivatives (cont’d) Contracts that are for an entity’s “own use” are not within the scope of IAS 39. Contracts that qualify as a written option for an underlying commodity that can be net settled, will be accounted for in accordance with IAS 39. However portfolios of derivatives are usually created based on economics and not accounting requirements. Embedding Commodity Risk Management (cont’d) A) Derivatives (cont’d) Portfolio of derivatives may consist as follows: “Own use” derivatives entered for the receipt or delivery of commodities in the normal course of business; and Trading derivatives for pure speculation. Embedding Commodity Risk Management (cont’d) B) Embedded Derivatives Long-term commodity purchase contracts frequently contain an index pricing clause. Such contracts contain embedded derivatives that may have to be separated and accounted for under IAS 39 as a derivative. Embedding Commodity Risk Management (cont’d) B) Embedded Derivatives (cont’d) Such price clauses must be separated if: The economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; A separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and The hybrid instrument is not measured at fair value with changes in fair value recognised through the income statement. Embedding Commodity Risk Management (cont’d) B) Embedded Derivatives (cont’d) Within commodity risk management, such contracts are often used as a natural hedge. F