Accounting within the framework of financial derivatives and accounting standards

Financial derivatives can be defined as financial instruments whose value depends on the value of the underlying asset. The main financial derivatives are forward, futures, option and swaps. These financial instruments are used for risk protection (hedging), speculation and arbitrage purposes. In recent years, communication and technology have been advancements, and the world has become a single market, and this has created a number of risks. Financial derivative tools are of great importance to manage these risks. These agreements make it easy to manage risks and estimate for the future. Financial derivatives, which are of great importance in the markets, have brought along some problems. One of the most important problems is the accounting problem of these vehicles. In relation to this issue, the International Accounting Standards Board (IASB) has developed accounting standards. The board published IAS-32 Financial Instruments: Presentation and IAS-39 Financial Instruments: Recognition and Measurement standards. In Turkey, an exact translation of these standards has been published under the name of TAS-32 and TAS-39, and financial derivative tools contracts are reported and accounted for in according to these standards. The purpose of this graduate thesis study is to explain the explanation of derivative markets, financial derivatives used in the markets, accounting standards related to these instruments and exemplary accounting practices for financial derivatives.