search query: @author Wittenbrink, C. / total: 1
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| Author: | Gebhardt, G. Gebhardt, R. Wittenbrink, C. |
| Title: | Accounting for financial instruments in the banking industry: conclusions from a simulation model |
| Journal: | European Accounting Review
2004 : VOL. 13:2, p. 341-371 |
| Index terms: | Accounting Banking Banks Financial statements |
| Freeterms: | Financial instruments Full fair value IAS US GAAP |
| Language: | eng |
| Abstract: | This paper studies the effects of three sets of accounting rules for financial instruments: old IAS before IAS 39 became effective, current IAS or US GAAP, and the full fair value (FFV) model on the financial statements of banks. The results show that under old IAS a fully hedged bank can portray its zero economic earnings in its financial statements and may also present income that is either positive or negative. Banks cannot adequately portray their best-practice risk management activities under current IAS or US GAAP. It is also argued that mandatory FFV accounting adequately reflects the economics of banking activities. |
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