Accounting process of derivatives according to international accounting standards in Turkish Derivatives Exchange

Financial risk arises from the volatility in financial market. Investors strive to manage their risks effectively against abrupt price swings of volatile business environment so risk management increases the importance of financial derivatives.In recent years global economy faces flows of funds between countries so accounting and financial reporting systems strive to support the effectiveness of financial market.There is an essential systems such as IASB in global financial market place. It put order two standards such as International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS).Accounting and financial reporting of financial instruments are arranged by this reporting systems. Moreover, new and complicated financial contracts like futures, forward, options and swaps arranged by this reporting systems in 2001 because this reporting systems put into practice only very recently.IASB made two arrangements in reporting financial instruments. While IAS 32 describes requirements for the presentation of financial instruments and identifies information that should be disclosed about them, IAS 39 explains the procedures about journal entry and revaluation of financial instruments. IFRS 7 Financial Instruments is in force on 01.07.2007. IAS 32 Financial Instruments Presentation and IFRS 7 reference are updated.In Turkey financial derivatives arranged in Seri:XI, No:19 sayılı ?Vadeli İşlem ve Opsiyon Sözleşmelerinin Muhasebesine İlişkin Usul ve Esaslar Hakkında Tebliğ?In accordance with the 40th article of Capital Market Law no. 2499, TURKDEX is the first private exchange in Turkey.Key Words1.Derivatives2.Forward3.Futures4.Swap5.Option