Premium
Accounting for derivatives: What is the group of thirty study and how does it affect you?
Author(s) -
Bullen Halsey G.
Publication year - 1993
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970050202
Subject(s) - accounting , business , portfolio , affect (linguistics) , set (abstract data type) , risk management , actuarial science , finance , computer science , linguistics , philosophy , programming language
In July 1993, the Global Derivatives Study Group of the Group of Thirty published Derivatives: Practices and Principles. The study explains derivatives and their uses and makes recommendations about the management of a derivatives portfolio. The study also defines a set of recommended risk management practices for dealers and end‐users, based on the best current practice. A broad conclusion of the study is that derivatives do not introduce risks that are fundamentally different from the risks that already are present in the financial markets. Therefore, the risks can be addressed within the present regulatory framework. Some areas of concern are in clarifying legal uncertainties and resolving legal inconsistencies among countries. The study also makes recommendations to accounting standards setters and tax authorities but does not attempt to define appropriate levels of regulatory capital for financial institutions.