Views on the integrity of global capital markets
21 August 2014

What Investors Need to Know about Financial Instruments Offsetting in Post-Crisis World

In the post-crisis era, investors are increasingly interested in developments regarding financial institutions, particularly as banks raise capital. In December 2011, the International Accounting Standards Board (IASB) introduced disclosure requirements to help investors evaluate the effect of netting arrangements related to financial instruments on an entity’s financial position. The updated requirements aim to help investors better assess financial instruments-related risk exposures. The new disclosures also will allow investors to better compare International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP) financial statements.

IASB member Patrick Finnegan, CFA, Fred Nieto, CFA, of the IFRS Education Initiative, and Vincent Papa, CFA, director of financial reporting policy at CFA Institute, discuss the rationale for changes, specific changes, effective dates, and analytical implications of these updated requirements.

 


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About the Author(s)
Sandy Peters, CPA, CFA

Sandy Peters, CFA, is head of financial reporting policy and serves as spokesperson for CFA Institute to key financial reporting standard setters including the IASB, FASB, and the US Securities and Exchange Commission. She holds the Certified Public Accountant (CPA) designation.

1 thought on “What Investors Need to Know about Financial Instruments Offsetting in Post-Crisis World”

  1. CFA classes in Indore says:

    I agree with most of your points, because this article gives the light in which we can observe the reality.

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