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In recent years, accounting standards have undergone a gradual but sure shift from pure historical accounting to selective fair value reporting. In particular, an accounting standard called International Accounting Standard (IAS) 39 Financial Instruments: Recognition and Measurement issued by the International Accounting Standards Board requires companies in member countries to recognize the fair values of derivative instruments on their balance sheets. It also requires companies to recognise financial assets at fair values, with the exception of assets that meet the conditions of held-to-maturity instruments or those that comply with the definition of loans and receivables.
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