of December 26, 2018 No. 153
About approval of the Instruction for financial accounting of transactions with derivative financial instruments in banks of Ukraine
According to Articles 7, of 15, of 41, 56 Laws of Ukraine "About the National Bank of Ukraine", article 68 of the Law of Ukraine "About banks and banking activity", for the purpose of enhancement of regulatory legal acts which establish procedure for reflection in financial accounting of transactions of banks of Ukraine the Board of the National Bank of Ukraine DECIDES:
1. Approve the Instruction for financial accounting of transactions with derivative financial instruments in banks of Ukraine which is applied.
2) the resolution of Board of the National Bank of Ukraine of December 9, 2016 No. 409 "About approval of Changes in the Instruction for financial accounting of transactions with derivative financial instruments in banks of Ukraine".
3. To accounting department (Lukasiewicz B. V.) after official publication to inform banks information on adoption of this resolution.
4. To impose control over the implementation of this resolution on the vice-chairman of the National Bank of Ukraine Borisenko R. N.
Approved by the Resolution of Board of the National Bank of Ukraine of December 26, 2018 No. 153
1. This Instruction is developed according to the Laws of Ukraine "About banks and banking activity", "About the National Bank of Ukraine", "About financial accounting and the financial reporting in Ukraine" and international accounting standards.
2. This Instruction determines accounting rules of transactions with derivative financial instruments (derivatives) in banks of Ukraine.
3. Financial accounting of derivative financial instruments (derivatives) is performed according to International Financial Reporting Standards and this Instruction.
4. Reflection in financial accounting of the transactions with derivative financial instruments (derivatives) which are not provided by this Instruction is performed according to their economic essence and the principles of international accounting standards.
5. The terms used in this Instruction are used in such values:
1) underlying asset - asset which is basis of the derivative financial instrument (derivative);
2) gross - basis - settlement system under the contract on gross basis (without offset of demands in reconvention under the contract);
3) currency swap - purchase and sale of one currency for another on the terms of the return redemption (with one partner) for certain date in the future on certain rate;
4) variation margin - the result of revaluation of the exchange derivative which is calculated stock exchange or person performing clearing activities by results of each trading day according to the specification of the derivative and can be positive if from transaction with such tool the income is expected at the moment, or negative - if is expected loss;
5) the built-in derivative tool is component of the hybrid (combined) tool which also includes the basic agreement about the non-productive tool what the variation of some cash flows from the combined tool is result of;
6) expenses on transactions - the taxes, duties, the fees and commission charges paid to brokers, dealers, agents and consultants, the exchange charges or fees, other actual costs connected with acquisition or sale of derivative financial instruments (derivatives) and which would not be if transaction of acquisition or sale of derivative financial instruments (derivatives) was not performed;
7) the internal cost of the call option is difference between the current market price of underlying asset and option exercise price;
8) the internal cost of the put option is difference between option exercise price for unit of underlying asset and the current market price of underlying asset;
9) discount or premium to the forward contract is difference between forward and current market the prices of underlying asset;
10) efficiency of hedging is amount in which changes in fair value or cash flows on hedging instrument develop with changes in fair value or cash flows on object of hedging;
11) hedging instrument is the appointed derivative financial instrument (derivative) or appointed non-productive (only for hedging of currency risk) the financial asset or the obligation, cost or cash flows from which, on expectations, will compensate changes of fair value or cash flows of object of hedging;
12) inefficiency of hedging is amount in which it is more change in fair value or cash flows on hedging instrument or less, than on object of hedging;
13) net - basis - settlement system under the contract on net basis (offset of demands in reconvention under the contract);
14) object of hedging - asset, the obligation, firm commitment, the high-probable predicted transaction or net investment in foreign economic unit which creates risk of change of fair value or future cash flows for bank;
15) the option - the contract which grants to his buyer the right, but not the obligation, to purchase (call option) or to sell (put option) certain quantity of underlying asset at determined price during the certain period or for the date determined in advance and establishes obligations of the option writer to perform terms of the contract if the buyer decides to exercise the right;
16) the derivative financial instrument (derivative) is the financial instrument having all three following characteristics:
its cost changes in response to changes of the established rate of percent, the price of the financial instrument, the price of goods, the currency rate, price index or rates, indicator of credit rating or index of creditworthness, or similar basic variable; does not require initial net investments or requires initial net investments which it is less, than those which would be necessary for other contract types which, on expectations, have similar reaction to change of market factors;
calculations for them are perfromed for future date;
17) initial or additional margin - warranty covering which is transferred between the buyer and the seller of the exchange derivative or between the parties of the off-exchange derivative for possibility of forced closing of open line item on derivatives, calculations for which are perfromed on a centralized basis at the exchange (the exchange derivative) or under the terms of the bilateral agreement (the off-exchange derivative), and also with involvement of the central partner;
18) option award - the price paid by the option buyer to his seller for the acquired right to use the option;
Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info
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