How to Recognize and Measure Compound Financial Instruments?

Basing on the Xiaomi case,this paper discusses the most appropriate accounting treatment of compound financial instruments under the framework of International Financial Reporting Standards(IFRS)and how other comprehensive income(OCI)plays important role in it.Overall,this paper provides some references for policymaker to standardize financial instruments standard.

Decision making on financial investment in Turkey by using ARDL long-term coefficients and AHP

Mathematical modeling methods are frequently used for solving everyday problems.Decision making,one such method,can be used in every aspect of life for different scales such as micro(households),medium(companies),and macro(states)decisions.Due to the large number of parameters affecting decision,it is possible to make mistakes in the selection of the appropriate investment instrument with classical methods;hence,scarce resources may be wasted,and sometimes it may even be impossible to make a decision.This study seeks to answer the question“Which financial investment instrument should be selected under the current conditions?”using decision making problems.Factors affecting gold,USD,and EURO,which are selected as the financial investment instruments in Turkey,are examined using the autoregressive distributed lag(ARDL)bound test.The selected variables are monthly and belong to the January 2009 to May 2018 period.The ARDL results show that the selected financial investment instruments are affected by most of the factors separately.By using the coefficients obtained from the ARDL model,the analytic hierarchy process(AHP)model was established.According to the results of the model,the EURO was determined as the most suitable financial investment for Ahmet and others with the same preferences.

Transition Effects from the Initial Adoption of IFRS 9 by Italian and German Blue Chip Companies

For the financial years from 2018,the new standard for accounting of financial instruments,IFRS 9,was applicable for the first time.Various questions arose in connection with the transition.For example,how high would the resulting transition effect be on equity?Another aspect related to the question of the extent to which the fair value measurement(through profit or loss)would increase.It is also of interest whether the previously presented IFRS 9 changes are classifiable as being material.Through the analysis of the financial statements of FTSE MIB and DAX 30 companies that were prepared for the first time in accordance with IFRS 9 in the year 2018,answers are given in this article to the aforementioned questions and a comparison is made regarding the extent to which national differences or commonalities existed.In the overall view of the absolute change in equity,for the FTSE MIB companies,a mean value of€-3.03 million was calculated and for the DAX 30 companies,€-34.29 million.The equity ratio(median),however,only declined marginally in percentage points with the FTSE MIB companies(-0.07),as well as with the DAX 30 companies(-0.02).With regard to the migration of financial assets,it has been shown that the accounting and measurement of more than 90%of financial assets of the FTSE MIB and DAX 30 companies have not changed.With the rest,the measurement net at fair value(through profit or loss)increased in both stock exchange segments.Nearly all changes to equity,the FTSE MIB,as well as DAX 30 companies,can be classified as immaterial.The extent to which the expansion of the measurement of financial instruments,which are measured at the fair value(through profit or loss)can be material,will ultimately depend on the individual case,in view of the future IFRS financial statements.This then depends on how high the actual change in fair value(through profit or loss)of these holdings is in a period in an individual case,in absolute and relative terms—for example,in proportion to the equity and the P&L.The latter also applies to FTSE MIB,as well as DAX 30 companies.