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MARKET RISK DISCLOSURES UNDER IFRS 7

 An entity possesses the risk if the fair value or cash flow of financial instrument will fluctuate as a result of change in market prices.

Following disclosures need to be shown in financial statement:

  • A sensitivity analysis of each type of market risk to which the entity is exposed showing how profit More >

Overnight Index Swap (OIS) – 1

To understand Overnight Index Swap (OIS) in depth we need to know some basics related to it.

What is Swap?

A swap basically means exchange. So any financial product suffixed or prefixed by words swap would indicate the exchange of something. This something might be future cash flows, interest rates (fixed or More >

IFRS on Effective Interest Rate

Effective Interest Rate

Effective Interest Rate (EIR) is a new concept to the existing Indian GAAP.

TheEffective Interest Rate (EIR) method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period.

TheEffective Interest Rate More >

Comparison of IFRS and Indian Accounting Standards

IFRS is a novel way of looking at accounting. IFRS is a “principle-based” standards rather than “rule-based” standard which are currently followed.

Under IFRS there is need to apply professional judgment consistent with intent and spirit of standards.

Various countries have adapted to IFRS in different ways, often embedding local cultures and More >

Challenges for implementation of IFRS

Key Practical Challenges for implementation of IFRS in India for Banking Industry

No stable Platform: There are many changes / amendment taking place for most of the standards from International Accounting Standard Board there has been no stable platform ready for banks.

Training: All Stakeholders has to be conversant and shall be able More >

Treatment Of Tangible Assets Under IFRS

Treatment of Property, Plant And Equipment (PPE) under IFRS

First time adoption of IFRS for PPE An entity can use fair value as deemed cost on First time adoption of IFRS

OR

It has to apply Retrospective application which means recalculate carrying amount of each PPE item according to IFRS since its More >

Explanation of IFRS 9

IFRS 9: FUTURE FINANCIAL INSTRUMENT (SIGNIFICANT FOR BANKS AND FINANCIAL INSTITUTIONS)

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CURRENT STATUS
  • IFRS 9 has been issued for financial assets
  • Standards relating to financial liability, impairment, derecognition and hedging will be issued in a phased manner
  • Impact of IFRS 9 on banks are significant
HELD TO MATURITY CLASSIFICATION

Delay in defining roadmap of IFRS for banking industry in India

Banking system in India is so far accustomed to rule based approach and hence for any implementation, Banks look to the regulator for guidelines i.e. RBI.

In case of Basel II implementation, the National Supervisor i.e. RBI is provided with power to modify the guidelines to suit the country condition. The More >

IFRS:Why do we need IFRS in India?

Do we need IFRS in India?

Indian Companies are listed on overseas stock exchange and have to prepare accounts with respect to GAAP followed in respective countries. Foreign companies having subsidiary in India have to prepare there accounts in order to meet overseas reporting.

FDI and FII’s are more comfortable with one More >

Crash and carry – New reserach suggests a way to make steady profits from the carry trade

  • Carry trade strategy : buying (investing in) a high interest yielding currency and selling (borrowing) a low yielding currency
  • Yen is favoured funding currency for the carry trade due to low interest rates in Japan
  • Dollar has become the next favoured one due to the economic crisis and near-zero rates in America More >
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