Financial instruments are contracts that give rise to both a financial asset of one company and a financial liability of another company. Financial instruments come in a variety of forms which include derivatives, hedges, and marketable securities.
Measured at fair market value:
Measured at cost or amortized cost:
Accounting for Gains and Losses on Marketable Securities
|pappoo: Very tricky.|
|Oksanata: think of all this fin.instruments as ones that are actively dealing with markets and ones that are not so active dealing with markets. So, you get following idea: if active - measure it at fair market value and recognize UNREALIZED gains/losses (assets:held for trading, available for sale etc, liabilities: held for trading, derivatives etc). if not active - measure it at cost or amortized cost and DO NOT recognize UNREALIZED gains/losses (held to maturity securities etc, other liabilities, see above classifications for fin.assets and liab.)|
|Oksanata: watch out though for net income/comprehensive income thing for UNREALIZED gains/losses recognition for trading and available for sale securities..if trading sec - put it to net income, if available-for-sale - put it to other comprehensive income|
|johntan1979: Reported under net income if under IFRS|