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What are the important accounting standards to study for financial instruments in commerce and accountancy?
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Important Accounting Standards for Financial Instruments in Commerce and Accountancy


1. International Financial Reporting Standards (IFRS 9)

IFRS 9 is a globally recognized accounting standard that provides guidelines for the recognition, measurement, and presentation of financial instruments. It focuses on three key areas:


  • Classification and measurement of financial assets and liabilities

  • Impairment of financial assets

  • Hedge accounting


IFRS 9 aims to provide more accurate and transparent information about financial instruments, allowing users to make informed decisions.


2. Generally Accepted Accounting Principles (GAAP)

GAAP is a set of accounting principles, standards, and procedures followed in the United States. It includes several key standards related to financial instruments:


  • FASB Accounting Standards Codification (ASC) 825: Financial Instruments

  • FASB ASC 815: Derivatives and Hedging

  • FASB ASC 320: Investments - Debt and Equity Securities

  • FASB ASC 310: Receivables


These standards provide guidelines for the recognition, measurement, and presentation of financial instruments under GAAP.


3. Indian Accounting Standards (Ind AS 32 and 109)

Ind AS 32 and 109 are the accounting standards issued by the Institute of Chartered Accountants of India (ICAI) for financial instruments. They are based on IFRS and are applicable to companies in India. The key provisions of these standards include:


  • Ind AS 32: Presentation and Disclosure of Financial Instruments

  • Ind AS 109: Financial Instruments - Recognition and Measurement


These standards provide guidance on the classification, measurement, and presentation of financial instruments in India.


4. Generally Accepted Accounting Principles in Japan (J-GAAP)

J-GAAP is the set of accounting principles followed in Japan. It includes several standards related to financial instruments:


  • Japan Financial Instruments and Exchange Act (FIEA)

  • Accounting Standards for Financial Instruments (ASBJ Statement No. 13)


These standards provide guidelines for the recognition, measurement, and presentation of financial instruments in Japan.


5. International Public Sector Accounting Standards (IPSAS 28)

IPSAS 28 is an accounting standard issued by the International Public Sector Accounting Standards Board (IPSASB). It provides guidance on the accounting for financial instruments in the public sector. The standard covers the classification, measurement, and presentation of financial instruments.


Conclusion

Understanding and applying the relevant accounting standards for financial instruments is essential in commerce and accountancy. The aforementioned standards such as IFRS 9, GAAP, Ind AS, J-GAAP, and IPSAS 28 provide comprehensive guidelines for the recognition, measurement, and presentation of financial instruments. These standards ensure consistency, transparency, and comparability in reporting financial instruments, enabling
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What are the important accounting standards to study for financial instruments in commerce and accountancy?
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