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Finance & Accounting Essentials

The document discusses accounting standards and financial derivatives. It lists 24 Indian accounting standards covering topics like revenue recognition, inventory valuation, cash flows, foreign exchange rates, and taxes. It then explains various derivative contracts like options, forwards, futures, and swaps. Options can be calls, allowing purchase of an asset, or puts, allowing sale. Strike price is the price for exercising an option.

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Jamodvipul
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89 views18 pages

Finance & Accounting Essentials

The document discusses accounting standards and financial derivatives. It lists 24 Indian accounting standards covering topics like revenue recognition, inventory valuation, cash flows, foreign exchange rates, and taxes. It then explains various derivative contracts like options, forwards, futures, and swaps. Options can be calls, allowing purchase of an asset, or puts, allowing sale. Strike price is the price for exercising an option.

Uploaded by

Jamodvipul
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Lives class on

Accounting and finance


Accounting standard,detivatives,option,call put, future
contracts,forward contract, swaps
Accounting Standards
1. AS 1 = Disclosure of Accounting Policies

2. AS 2= valuation of Inventory
3. AS 3= Cash flow Statement
4. AS 4= Contingency and event occurring after bal ance sheet dare
• AS 5= Net profit and loss for the period
• AS 6= depreciation accounting
• AS 7=Construction Contract
• AS 9= Revenue Recognition
• AS10 = Fixed Assets
• AS 11 = Effect of change in Foreign Exchange Rate
• AS 12= Accounting for Government Grants
• AS 13= Accounting for investment
• AS 14= Accounting for Amalgamation
• AS 15= employee benefits
• AS 16= borrowing Cost
• AS 17= segment reporting
• AS 18= Related party Disclosure
• AS 19= leases
• AS 20= EPS
• AS 21= Consolidated Financial Statements
• AS 22= accoting for taxes in income
• AS 23= according for investment in association in consolidated FS
• AS 24 = Discountinuing Operations
• AS25 = Interim Financial reporting
• AS 26= Intangiblr Asset
• AS 27 =Financial reporting of interest in joint venture
• AS 28= Imparement of Assets
• AS 28=Provision ,contingent liability and contingent assets
Option
• Claim without liabilty
• Called contingent claim
• Right without obligation
• 2 types = Call and Put
Call option
• The option to buy an asset
Put option
• Option to Sell an asset
Strike Price
• The price at which option can b excercised
Underlying asset
• The asset on which the put or call is created
Types of Option
• European Option = when excercised at maturity date
• American Option = exercised anytime before maturity
3 Possibilities
• IN THE MONEY = Advantageous
• Out the money = disadvantageous
• At the money =neutral
Option premium
• Paid in advance ,doesn’t matter exercise call / put
• Or not
• Types = Call premium other Put premium
Forward contract

• IN finance, a forward contract or simply a forward is a non-standardized


contract between two parties to buy or to sell an asset at a specified future
time at a price agreed upon today, making it a type of derivative instrument.
Future Contracts
• In finance, a futures contract is a standardized forward contract, a legal
agreement to buy or sell something at a predetermined price at a specified
time in the future, between parties not known to each other. The asset
transacted is usually a commodity or financial instrument
Swaps
• A swap is a derivative in which two counterparties exchange cash flows of
one party's financial instrument for those of the other party's financial
instrument. The benefits in question depend on the type of financial
instruments involved.

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