Accounting of derivative instruments

Today, as a result of globalization, the world economy has become a single economy and its rapid development has brought along the development of competition and efficiency in financial markets as well as an increase in financial risk. Investors who are affected by the uncertainties in the financial markets and the fluctuations in interest rate and exchange rates have been searching for a new product. Derivatives from basic financial instruments are a new tool for investors to protect themselves from these negative situations in various ways. Derivative products that can be used for hedging or speculative purposes generally consist of forward contracts, futures contracts, options and swaps. The use of derivative products is rapidly evolving. Accounting for derivative products businesses in Turkey exceeds certain limits of Turkey Accounting Standards (TAS) and Turkey Financial Reporting Standards (TFRS) implementation has taken the legal imperative. TAS 32 Financial Instruments Presentation, TAS 39 Financial Instruments: Recognition and Measurement, TFRS 7 Financial Instruments: Disclosures and TFRS 9 Financial Instruments are the standards by which the derivative products are regulated. In this study, general information about TAS / TFRS, which includes the financial derivative instruments and derivative instruments, is given. In addition, how to account for derivative instruments by using accounts in uniform chart of accounts is explained with examples. Keywords: Financial Derivative Instruments, Accounting of Derivative Products, Futures, Forward, Option, Swap, TAS 32, TAS 39, TFRS 7, TFRS 9.