Accounting for Financial Instruments [Hardcover]

Cormac Butler (Author)

Book Description

Publication Date: April 7, 2009 | ISBN-10: 0470699809 | ISBN-13: 978-0470699805 | Edition: 1

This practical book shows how to deal with the complicated area of accounting of financial instruments. Containing a huge number of sophisticated worked examples, the book treats this complex subject in a way that gives clear guidance on the subject. In an introductory, controversial overview of the subject, the book highlights the mistakes that both auditing firms and the accounting standard setters are making, and demonstrates the contribution the International Financial Reporting Standards have made to the current credit crisis.

Editorial Reviews

From the Inside Flap

"Cormac skilfully covers the accounting for derivatives and hedging activities in a clear and succinct manner. This book provides a firm basis for understanding the strengths and shortcomings of the current standards on financial instruments, highlighting them with a good number of real life examples. This is one of the few accounting books available on the market that make a complex and dry subject understandable and even enjoyable. "

Juan Ramirez, BNP Paribas, author of ‘Accounting for Derivatives’

‘Cormac Butler has written a very timely book, with fair value accounting being heavily criticised as a major contributor to the recent banking crisis. More generally, accounting for complex instruments and practices such as securitisation is neither simple nor widely understood. This book is an extremely lucid and full account of the myriad of current practices, which explains why financial institutions can declare a range of profits in the same situation. Whilst covering a wide canvas, Cormac has also made the topic very readable with many interesting case-studies. I would strongly recommend this book to anybody wishing to understand how modern financial instruments are treated by the accountants.’

Richard Flavell, author of ‘Swaps and other Derivatives’.

From the Back Cover

Regulators, credit rating agencies and accountants have come under increased pressure to reveal why they allowed financial institutions to take huge concealed leveraged exposures, creating a price bubble and a subsequent government bail out. Already investors are calling for major changes in the way that financial instruments are regulated and accounted for.

‘Accounting for Financial Instruments’ is designed to address the practical difficulties that accountants and auditors face when dealing with complex financial instruments. Accounting rules have been slow to catch up with the advent of complex derivative instruments, while the need for an improved accounting framework in financial institutions is greater than ever in view of the current financial crisis. The author makes use of practical examples (including extracts from accounts) and case studies to give depth to his analysis of various issues in accounting for derivatives, including:

• The influence of corporate governance on accounting for financial instruments

• The impact of IFRS and IAS accounting standards on the detail and implementation of accounting procedures for financial instruments

• The differences in European and American accounting standards in tackling the problems of off-balance sheet accounting

• Accounting for credit risk

• The role of accounting and auditing in the detection and prevention of fraud

• Accounting for insurance

• Hedge Accounting

• The influence of Basel II

• Accounting and Reconciliation

This work’s combination of discussion and practical examples makes it a useful reference for accountants dealing with these products. It provides guidance on expected future regulatory changes in accounting for these instruments, and is a valuable exposé of the weaknesses in accounting procedures. It will be of interest to accountants, auditors, compliance officers, and anyone working with derivative products.

See all Editorial Reviews

Product Details

• Hardcover: 296 pages
• Publisher: Wiley; 1 edition (April 7, 2009)
• Language: English
• ISBN-10: 0470699809
• ISBN-13: 978-0470699805
• Product Dimensions: 9.6 x 6.9 x 1.1 inches
• Shipping Weight: 1.5 pounds (View shipping rates and policies)
• Amazon Best Sellers Rank: #1,099,377 in Books (See Top 100 in Books)

More About the Author

Cormac Butler is currently an active equity and options trader and a former consultant with Lombard Risk Systems London and has also worked with Peat Marwick and PricewaterhouseCoopers. He has considerable international experience as a training consultant in derivative accounting, Corporate Finance and Derivative Mathematics, working with major banks including Banque BNP Paribas. He has conducted in-house courses Morgan Stanley, PriceWaterhouseCoopers (Holland), Investec (South Africa) and ABB Switzerland and Asian Development Bank. In addition, he has worked for IIR and Euromoney in Singapore, Hong Kong, Thailand, America and Saudi Arabia. Cormac graduated from the University of Limerick, Ireland with a degree in Finance He has recently published Mastering Value at Risk (Financial Times Pitman) which is currently on the best sellers list (for Risk Management books) with Amazon.com, Gloriamundi.org and Financial World Bookshop (London). He has also published Accounting for Financial Instruments by Wiley.