CFM23070 - New UK GAAP: FRS 102: recognition and derecognition of financial instruments
For those entities applying FRS 102 with an accounting period beginning on or after 1 January 2015.
Recognition
바카라 사이트˜Recognition바카라 사이트™ refers to the requirement to recognise all financial assets and liabilities, including derivatives, on an entity바카라 사이트™s balance sheet.
FRS 102 states that an entity must recognise a financial asset or financial liability when, and only when, it becomes a party to the contractual provisions of the instrument.
For example, if a company receives a firm order for goods from a customer, it should delay recognition of the trade debt until at least one of the parties has performed under the agreement - which will normally be when the goods are shipped or delivered.
In contrast, however, a forward contract or option is recognised on the commitment date if it falls within the scope of FRS 102 section 12.
Derecognition
바카라 사이트˜Derecognition바카라 사이트™ means the removal of a previously recognised financial asset or financial liability from the balance sheet. CFM23075 explains derecognition of a financial asset, and CFM23078 explains derecognition of a financial liability.