HEDGE(公平价值避险).pptVIP

Chapter 17: Investments(Appendices A B supplemental slides) Understanding Derivatives Basic Principles in Accounting for Derivatives Derivatives Used for Hedging Fair value hedge（公平價值避險） Cash flow hedge（現金流量避險） Other Reporting Issues Embedded derivatives（嵌入式衍生性商品） Qualifying hedge criteria Disclosure Provisions Comprehensive Hedge Accounting Example Controversy and Concluding Remarks Derivative financial instruments (derivatives) are useful for risk management (i.e., smooth the fluctuations caused by various types of risks) The value of a derivative is derived from another asset (the underlying asset) or is related to a market-determined indicator Derivatives’ face values or cash flows can be used to offset the changes in fair values or cash flows of the assets or liabilities at risk Derivatives can be dangerous and all parties involved should understand the risks and rewards associated with these contracts Examples of derivatives: Forward contract（遠期合約） Futures（期貨） Option contract（選擇權合約） Swaps（交換） Users of derivatives: Producers and Consumers The objective is not to gamble on the outcome, but to hedge against perceived risks and to ensure an acceptable financial result Users of derivatives: Speculators（投機者） Betting on the quick changes in market conditions and try to profit from those changes Arbitrageurs（套利者） Attempt to exploit inefficiencies in various derivative markets Seek to lock in profits by simultaneously entering into transactions in two or more markets Speculators and arbitrageurs are very important in keeping the derivatives market liquid on a daily basis Derivatives should be reported in the financial statements at their fair values (SFAS No. 133) Unrealized gain or loss: Derivatives held for speculation : Recognized immediately in come Derivatives used for hedging : depending on the type of hedge used Call option/Put option（買權/賣權） Give the holder the right, but not the obligation, to buy (sell) shares at a preset price (the strike price or the ex