Suprovich G. Accounting and auditing of financial derivatives

The interpretation of the term "derivative" based on more precise definition of the term "financial derivative" was clarified in the thesis. The classification of derivatives was extended through the segregation of the sign "for the purpose of use", according to which hedging, speculative, arbitrage and investment derivatives were identified. The approaches to acceptance and accounting valuation of derivatives by optimizing the choice of methods within them were formed. The elements of accounting policy for financial derivatives were determined. The procedure of representation of operations with financial derivatives in the accounts was improved through the correction of the off-balance sheet account name 03 for "Contract rights and obligations" and opening analytical accounts of the second and third order within it. The information about calculation of variation margin and guarantee obligations was detailed within the analytical accounts of subaccount 379 "Calculation of operations with derivatives". The structure of f.2 "Income statement" (Statement of comprehensive income) was specified and units XVI-1 "Financial derivatives", XVI-2 "Commodity derivatives" to the section XVI "Derivatives" of f.5 "Notes to the annual financial statement" were formed in order to improve analyticity, reliability and clarity of accounting reporting. The organization of the technology of auditing of financial derivatives and methodological approaches to the calculation of audit risk and its components in the process of audit were studied in order to increase the efficiency of audit. The structural elements of the internal control subsystem of enterprises which use financial derivatives were outlined. The main characteristics of these elements were specified.