That internationally Accounting standard 39 (IAS 39) is an accounting regulation of the IASB.

Introduction

IAS 39 regulates the beginning and the evaluation of

• financial net assets,
• financial commitments and
• did not determine contracts over the purchase or sales financial post.

In particular IAS 39 regulates also the beginning and the evaluation of derivatives. An important aspect of the IAS 39 is in this connection the so-called Hedge Accounting. The standard is to be applied in principle by all balancing enterprises (entities) to all kinds of financial instruments.

Development and application of the IAS 39

The work on a standard for the collection, evaluation and disclosure of financial instruments began already in the year 1988. IAS 39 preceded three drafts:

• E 40 Financial of instrument 1991
• E 48 Financial of instrument 1994
• E 62 Financial of instrument: Recognition and Measurement 1998.

During this phase the regulations were separated for disclosure and discharged in a separate standard 1995: IAS of 32 financial instruments: Data and representation. IAS 39 was issued in December 1998 and was only intended as "“interCIM standard"”. Immediately after its publication the IASC/IASB furnished a new topic-specific project. At the same time since 1997 the efforts begun in co-operation with other standard Settern were continued around a strong expansion of the application fair of the VALUE with the balance by financial instruments. They culminated finally 2000 in the publication of a Draft standard, which however so far no comprehensive success had granted.

Range of application

IAS 39 regulates the beginning and the evaluation of financial net assets as well as financial commitments and is to all financial instruments to be applied. Exceptions of this range of application are regulated by IAS 39,2. Agreeing with IAS 32 IAS 39,8 defines a financial instrument as follows:

A financial instrument is any contract that gives rise ton of A financial ate OF one entity and A financial liability or equity instrument OF more another entity.

By a financial instrument all contractual requirements and obligations are to be understood, which have directly or indirectly the exchange from currencies to the article. The rights and/or obligations resulting from contracts or agreements must be based thereby on financial circumstances. Financial instruments can be divided in accordance with IAS 39 in financial net assets, financial commitments and own capital funds instruments.

The description of financial net assets taken out of IAS 32 covers 39,11 following positions and rights in accordance with IAS:

1. Money and/or cash in hand (cash),
2. a own capital funds instrument of another enterprise,
3. a contractual right,
   • To receive currency or another financial net assets from another enterprise in or
   • to exchange financial net assets or financial debts with another enterprise under potentially favourable conditions
4. a contract, one will fulfill to that in own own capital funds instruments of the enterprise or can and with that
   • non-derivative a financial instrument an obligation of the enterprise contains, or to contain can to receive a variable number of own own capital funds instruments
   • derivative a financial instrument will be fulfilled in other way or can than by the exchange of firm amount or another financial net assets against a firm number of own own capital funds instruments.

A financial debt and/or commitment is in contrast to this,

1. a contractual obligation
   • to supply liquid means or another financial net assets to another enterprise
   • to exchange financial net assets or financial commitments on possibly unfavorable conditions with another enterprise
2. a contract, that in own own capital funds instruments of the enterprise will be fulfilled or can and with that
   • Non-derivative a financial instrument an obligation of the enterprise contains, or to contain can to deliver a variable number at own own capital funds instruments
   • derivative a financial instrument will be fulfilled in other way or can than by the exchange of firm amount or another financial net assets against a firm number of own own capital funds instruments.

A own capital funds instrument (Equity instrument) is after IAS 32 and IAS 39 a contractual agreement, which has a Residualanspruch at net assets of an enterprise after departure of all obligations to the article.

In accordance with IAS 39,9 a derivative is present if with a financial instrument:

1. the value on a basis object and/or a Underlying, as for instance interest rate, share, foreign currency, etc. is dependent,
2. compared with other instruments, which react in similar way to changes of the market conditions no or only a small net investment is necessary,
3. the maturity in the future lies.

Evaluation principles

IAS 39 is based in its current version in principle on a so-called "„Mixed Model "“of the evaluation. This means that the standard contains both elements of the balance to initial costs, and elements of the evaluation to the current value (fair VALUE), which can be settled.

Those continued initial costs of financial net assets or a financial debt (amortised cost OF A financial ate or financial liability) are after IAS 39,9 the amount, with which these were evaluated during the first collection, less repayments, plus or less with application of the effective interest method cumulated the redemption of a any difference between the original amount and the amount with as well as less any reductions (either directly or by use of a depreciation post) for depreciations or irrecoverableness. The effective interest method (effective interest method) serves the computation of the continued initial costs and the allocation of the interest yields and - expenditures during the respective period. The effective interest (effective interest guesses/advises) is the calculation interest rate, with which estimated future supplies of currency or - discharges (estimated future cash payments or receipts) at the expected run time of the financial instrument on the net book value of financial net assets or the financial debt to be abgezinst.

IAS 39,9 calls fair the VALUE or current value which can be settled the amount, to which between expert, contract-willing and from each other independent business partners (in on poor' s length transaction) net assets could be settled be exchanged or a debt. The term fair VALUE can be translated with the expressions market value or current value which can be settled. To carry the term "“fair VALUE"” however generally consciously distinguished from a possible "“Market VALUE"” around the fact calculation that for a multiplicity of financial instruments no stock exchange or market price is present, and this only by models to be determined can. IAS 39 plans with priority publicly noted market prices for the determination fair of the VALUE. If no active market exists, that can be determined fair VALUE by appraisal procedures:

"„Valuation of techniques include using' s length market transactions between knowledgeable, willing parties, if available, reference tons the current fair VALUE OF another instrument that recent poor is substantially the same, discounted cash flow analysis and option pricing models."”

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