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.
1) the resolution of Board of the National Bank of Ukraine of August 31, 2007 No. 309 "About approval of the Instruction for financial accounting of transactions with derivative financial instruments in banks of Ukraine", registered in the Ministry of Justice of Ukraine on September 26, 2007 for No. 1104/14371;
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;
19) the predicted transaction - transaction in which implementation obligations, but which is expected in the future are not undertaken;
20) interest rate swap - the contract which conditions provide exchange of interest payments which are calculated at the different rates, but taking into account one conditional amount during the term of the agreement;
21) the current exchange rate or the current market price is the foreign exchange rate or the price of commodity unit which are applied during transactions in the market spot;
22) fair value - the price which would be received for sale of asset or is paid for transfer of the obligation in regular transaction between participants of the market for date of assessment;
23) firm commitment is the agreement which is binding on exchange of certain quantity of resources at the determined price of certain future date or of certain future dates;
24) the financial instrument with the indexed cost - the hybrid (combined) tool which includes the basic agreement and the built-in derivative tool(s);
25) the forward exchange rate or the forward price is the foreign exchange rate or the price of commodity unit which are applied during transactions on the forward market;
26) the forward contract (forward) is bilateral contract which certifies the obligation to acquire (to sell) underlying asset in certain time and under certain conditions in the future with fixing of the price during the conclusion of the contract;
27) the futures contract (future) - the contract similar forward, but happens on the standardized conditions: it is performed only at the exchanges, under their control, and the form and conditions of contracts are unified, and calculations concerning purchase and sale of futures contracts are perfromed through clearing house of the exchange which guarantees timeliness and completeness of payments;
28) hedging - application of one or several hedging instruments for the purpose of total or partial compensation of changes of fair value of object of hedging or the related cash flow;
29) cash flow hedging is hedging vulnerability to variability of cash flows which can be referred on the specific risk connected with acknowledged asset or liability in general or its component (like all or separate future interest payments on debt obligation with variable rate) or with the high-probable predicted transaction, and can affect profit or loss;
30) hedging of fair value is hedging of vulnerability to changes in fair value of acknowledged asset or liability, either unrecognized firm commitment, or component of any such object which can be carried on specific risk and can affect profit or loss;
31) hedging of net investments is hedging of currency risks of net investments in foreign economic unit, including monetary item which is its long-term debit or accounts payable on this economic unit;
32) strike price - the price of underlying asset at which calculations in case of obligation fulfillment under the contract are made;
33) the temporary cost of the option is difference between award of the option and its internal cost.
6. The bank reflects in financial accounting of transaction with derivative financial instruments (derivatives) (further - derivative financial instruments) according to their economic essence according to balance and off-balance sheet accounts of the Chart of accounts of the financial accounting of banks of Ukraine approved by the resolution of Board of the National Bank of Ukraine of September 11, 2017 No. 89 (with changes) (further - the Chart of accounts).
7. The bank has the right to use technical accounts 3800 "Line item of bank of rather foreign currency and bank metals", 3801 "Equivalent of line item of bank of rather foreign currency and bank metals" of account group 380 "Line item of bank of rather foreign currency and bank metals of" the Section 38 "Line Item of Bank of Rather Foreign Currency and Bank Metals" of class 3 "Of transaction with securities both other assets and liabilities" and contra accounts of the Section 99 "Contra Accounts and Off-balance Line Item of Bank" of the class 9 "Off-balance accounts" of the Chart of accounts in case of reflection in financial accounting of transactions with derivative financial instruments.
8. The bank reflects derivative financial instruments in financial accounting on activity date on the corresponding off-balance accounts as requirements for receipt of one asset and liability for delivery of another.
9. The bank should put financial asset and the financial liability and net amount to give in the financial status statement if only if bank:
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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