Question

All of the following are requirements for disclosures related to financial instruments except
A) disclosing the fair value and related carrying value of the instruments.
B) distinguishing between financial instruments held or issued for purposes other than trading.
C) combining or netting the fair value of separate financial instruments.
D) displaying as a separate classification of other comprehensive income the net gain/loss on derivative instruments designated in cash flow hedges.

Accepted Answer

The correct answer is C because financial statements typically require the disclosure of fair value and carrying value of financial instruments, distinguishing between instruments held for trading and other purposes, and displaying net gains or losses on derivative instruments in other comprehensive income. However, combining or netting the fair value of separate financial instruments is not a standard requirement, as financial instruments are generally required to be presented separately to ensure transparency and provide detailed information about the financial position and risk exposure of the entity.

Quiz 24: Appendix H: Accounting for Derivative Instruments

All of the following are requirements for disclosures related to financial instruments except