– International Financial Reporting Standards – IFRS – obligation to apply, for businesses and financial institutions for their individual and consolidated accounts, for listed and non-listed companies in the European Union and in Greece.
– Financial instruments: Introduction, applicable Standards and definitions.
– Classification of financial instruments by their issuer into equity or debt instruments based on IAS 32 – Financial Instruments: Presentation.
– Accounting recognition and measurement for financial assets and liabilities; debt, equity, derivative instruments; SPPI (solely payments for principal and interest) test – based on IFRS 9 – Financial Instruments, recognition and measurement.
– Basic differences between IFRS9 and the previous standard on financial instruments IAS 39.
– Bookkeeping (journalising, use of T accounts) for accounting events related to financial instruments: measurement at fair value through profit and loss/at fair value through other comprehensive income, measurement at amortised cost.
– Expected loss model, impairment losses for financial instruments.
– Fair value hierarchy, level 1,2,3 fair values for financial instruments
– Introduction to hedge accounting, bookkeeping for fair value hedge, cash flow hedge.
– Accounting for compound instruments, convertible bonds, split accounting: separation of convertible debt into its debt and equity components.
– Introduction to accounting for stock options and warrants granted to personnel, IFRS 2: Share-based payment.
– Disclosures relevant to financial instruments, IFRS 7 -Financial Instruments: Disclosures.
– Accounting for leasing, IFRS 16- Leasing.

The purpose of this module is to cover the basic concepts of accounting for financial instruments, frequently found in the financial statements of banks and financial institutions. The module material is developed based on International Financial Reporting Standards – IFRS) and the basic Standards covered by the module are FRS 9- Financial Instruments, recognition and measurement, IAS 32 – Financial Instruments: Presentation and ΔΠΧΑ IFRS16- Leasing.

At the end of the semester the students should be able to:
– Know and understand which IAS and IFRS associate with different types of financial instruments.
– Explain the interplay between the different Standards on financial instruments.
– Select an appropriate measurement method for specific financial instruments, and understand the measurement choices given by the Standards, when such choices exist, as well as the effect of these choices on the financial position and the comprehensive income of the firm.
– Understand the principles of recognition and measurement after initial recognition, and also derecognition for financial instruments and their different measurement categories.
– Are in position to record using journal entries and T accounts accounting events related to the recognition and measurement after initial recognition for financial instruments.
– Understand the basic problems and practical challenges that may occur in the everyday business world regarding the recognition and measurement after initial recognition for financial instruments.
– Understand the degree of discretion that exists for corporate managers about recognition and measurement post-initial recognition for financial instruments.

– Search, analysis and synthesis of financial data and relevant information.
– Critical thinking on scientific topics related to the content of the module, relevant decision-making.
– Development of analytical and synthetic thinking, ability for autonomous work.
– Working in an international environment, understanding the challenges of applying accounting rules in an international environment.
– Working in a multidisciplinary environment, collaborating with scholars of closely related scientific fields.
– Production of creative and deductive thinking and critical reasoning.

Compulsory coursework: 30%
Compulsory individual assignment: 70%

The students are asked to provide answers to a series of cases and exercises and problems, related to classifying, recognising and measuring after initial recognition events on financial instruments.

The module assignment involves the use of econometrical techniques (based on data extracted from archival sources) in order to assess the statistical significance of financial accounts related to financial instruments (found on financial statements of banks and financial institutions) for explaining the market performance of relevant firms. Details on the sample of companies to select, methodology etc., are provided in class.

– Module material uploaded on Eclass
– Kontos, G. (2019), Accounting for Banks and Leasing Companies, Factoring και Forfaiting3rd Edition Diplografia Editions
– Elliott/Elliott, J. (2015/2017), Financial Accounting and Reporting, Pearson, 17th or 18th Edition.
-Alexander/Britton/Jorissen/Hoogendoorn/van Mourik (2017), International Financial Reporting and Analysis, Cengage, 7th Edition.
– Stolowy/Ding (2015), Financial Accounting and Reporting – A global perspective, Cengage, 5th Edition.
– Picker/Clarck/Dunn/Kolitz/Livne/Loftus/van der Tas (2016), Applying International Financial Reporting Standards, Wiley, 4th Edition.

Relevant Literature:

Acharya, V.V., and Ryan, S.G. (2016). Banks’ financial reporting and financial system stability, Journal of Accounting Research, 54(2), 277-340.
Amel-Zadeh, A., Barth, M., and Landsman, W.R. (2017). The contribution of bank regulation and fair value accounting to procyclical leverage, Review of Accounting Studies, 22(3), 1423-1454.
Bhat, G., and Ryan, S.G. (2015). The impact of risk modeling on the market perception of banks’ estimated fair value gains and losses for financial instruments, Accounting, Organizations, and Society, 46, 81-95.
Bierey, M., and Schmidt, M. (2017). Banks’ use of accounting discretion and regulatory intervention: The case of European banks’ impairments on Greek government bonds, The International Journal of Accounting, 52(2), 122-141.
Boulland, R., Lobo, G.J., and Paugam, L. (2019). Do investors pay sufficient attention to banks’ unrealized gains and losses on available-for-sale securities? European Accounting Review, published online ahead of print.
Dong, M., and Zhang, X.-J. (2018). Selective trading of available-for-sale securities: Evidence from U.S. commercial banks, European Accounting Review, 27(3), 467-493.
Fiechter, P. (2011). Reclassification of financial assets under IAS 39: Impact on European banks’ financial statements, Accounting in Europe, 8(1), 49-67.
Teixeira Lopes, P., and Lima Rodrigues, L. (2007). Accounting for financial instruments: An analysis of the determinants of disclosure in the Portuguese stock exchange, The International Journal of Accounting, 42(1), 25-56.