خرید و دانلود نسخه کامل کتاب Rethinking Management and Economics in the New 20’s The 2022 Centre of Applied Research in Management and Economics (CARME) Conference – Original PDF

he companies’ business activities may be subject to different market risks, such as interest rate, exchange rate volatility and commodity prices. Companies can adopt risk management practices to isolate the volatility effects of financial exposures, such as impacts on cash flows and future losses or gains from changes in interest rates and changes in exchange rates (Chang et al., 2016), and financial derivatives are considered as a tool to mitigate the financial risks faced by corporations (Guay & Kothari, 2003). In order to adequately reflect the use of financial instruments in the A. C. de Paula Leite · L. M. Pimentel (B) University of Coimbra, FEUC, Coimbra, Portugal e-mail: liliana.pimentel@fe.uc.pt © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Santos et al. (eds.), Rethinking Management and Economics in the New 20’s, Springer Proceedings in Business and Economics, https://doi.org/10.1007/978-981-19-8485-3_1 3 4 A. C. de Paula Leite and L. M. Pimentel risk activities of companies, hedge accounting proposes some guidelines to repre- sent in the financial statements the accounting effects of entities that choose to use financial instruments to manage their exposures arising from market and financial risks (IFRS 9.6 1.1). The adoption of hedge accounting is voluntary in the entity’s risk management. If the entity decides to apply, measurement of financial instruments under hedge accounting standards is permitted when all the specific requirements described in the standard are met. The application of derivative instruments for corporate risk management has shown substantial growth in recent years and, as a result, there is an increasing need to improve the regulation of their accounting treatment and disclosure (Camp- bell et al., 2019; Panaretou et al., 2013). Additionally, accounting regulators are concerned with providing solutions that facilitate the adoption of rules by entities and that these rules can be understood from the point of view of investors and other users. In historical context, in 2001 the International Accounting Standard Board (IASB) adopted the International Accounting Standard (IAS) 39 Financial Instruments: Recognition and Measurement, published by the International Accounting Stan- dards Committee (IASC) in 1999. Originally, IAS 39 was first published in 1998 and superseded some chapters of IAS 25 Accounting for Investments, issued in March 1986. IAS 25 was not a hedge accounting standard, but an investment standard, so there were no specific requirements for hedge accounting until publication of IAS 39. After the publication of the standard, IAS 39 was strongly criticized for its high complexity and restrictive rules, so that to simplify hedge accounting, the IASB started in 2009 a project to replace IAS 39 with IFRS 9 (Müller, 2020). In order to improve accounting standards for users’ best practices, the IASB divided its IAS 39 replacement project into three main phases and, at the end of each phase, issued the chapter of the International Financial Reporting Standard (IFRS) 9 which replaced the corresponding requirements in IAS 39. One of the goals of adopting a more comprehensive IFRS regime in this area has been to increase trans- parency in the disclosure of derivatives and their use for risk management purposes (Panaretou et al., 2013). After publication of the full version in 2014, IFRS 9 allows an entity to choose as an accounting policy to apply the hedge accounting requirements of IFRS 9 or continue to apply the hedge accounting requirements of IAS 39 in accordance with paragraph 7.2.21 paragraph 6.1.3 of IFRS 9. This option is valid for companies until the IASB finalizes the IFRS 9 macro hedging project (IFRS 9, BC6.104) (Fig. 1). The purpose of hedge accounting is to represent, in the financial statements, the effect of the risk management activities of an entity that uses financial instruments to manage exposures arising from specific risks, and these instruments may influence the result or, also, the other comprehensive results (IFRS 9.6. 1.1). Hedge accounting is based on offsetting gains and losses on the hedging instrument and hedged object, so the effect of market risk on the value of the hedging instrument and hedged item impacts the effectiveness of the hedge (IFRS 9, B6. 4.7