|Derivatives and other financial instruments – cash flow and
fair value hedges
|Derivatives and hedge instruments are measured at fair value; changes in fair value are recognised in income statement except for effective portion of cash flow hedges, where the changes are deferred in equity until effect of underlying transaction is recognised in income statement.
Gains/losses from hedge instruments that are used to hedge forecasted transactions may be included in cost of non financial asset/liability (basis adjustment).
|Similar to IFRS, except no ‘basis adjustment’ on cash flow hedges of forecasted transactions.
|No comprehensive guidance; except for:
(a) forward exchange contracts intended for speculative or trading are carried at fair value; whereas those not held for speculative or trading, the premium or discount is amortized over life of the contract and the exchange difference is recognised in income statement;
(b)equity index futures and options and equity stock options are carried at lower of cost or market;
(c) interim clarification on forward exchange contract to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction.
industry specific guidance on certain instruments for e.g. banking industry.
|Derivatives and other financial instruments – net investment hedges
|Effective portion of gains/losses on hedges of net investments is recognised in equity; ineffective portion is recorded in income statement.
Gains/losses held in equity are transferred to income statement on disposal or partial disposal of investment.
|Similar to IFRS.
Gains/losses are transferred to income statement upon sale or complete or substantially complete liquidation of investment.
|No specific guidance
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