ACC 620: Accounting for Financial Instruments and Financial Institutions

The course addresses in-depth the accounting for financial instruments and by financial institutions under IFRS as well as related conceptual issues currently discussed by standard setters and bank regulators. It covers the definition of financial instruments, their classification, initial and subsequent measurement, impairment, derecognition, as well as their accounting in the context of hedging transactions. We also discuss relevant notes disclosures in example banks’ financial statements and links to capital regulation.

Learning outcomes
The course aims at developing the skills to understand, apply, analyze and critically evaluate accounting standards in the complex field of accounting for financial instruments and financial institutions. Students will get an in-depth understanding of the current IFRS accounting rules, in particular the comprehensive IFRS 9, and understand the underlying conceptual discussions surrounding their development. Overall, students will gain a deep and profound understanding of these advanced topics of financial accounting.

Necessary prerequisites

Recommended prerequisites

Forms of teaching and learningContact hoursIndependent study time
Lecture2 SWS8 SWS
Exercise class2 SWS5 SWS
ECTS credits6
Graded yes
Form of assessmentWritten exam (90 min)
Restricted admissionno
Further information
Performing lecturer
Prof. Dr. Holger Daske
Prof. Dr. Holger Daske
Frequency of offeringSpring semester
Duration of module 1 semester
Range of applicationM.Sc. MMM, M.Sc. Bus. Edu., M.Sc. Econ., M.Sc. Bus. Inf., LL.M.
Preliminary course work
Program-specific Competency GoalsCG 1
LiteratureErnst & Young (2020). International GAAP 2020: Generally Accepted Accounting Practice Under International Financial Reporting Standards. Chichester.
Course outlineIntroduction
Importance and Issues
Development of Accounting Standards for Financial Instruments
Relevant Standards and Effective Dates
BasicsDefinitions and Scope
Scope of IFRS 9
Measurement of Financial Instruments
Fundamental Measurement Conceptions
Accounting Measurement Conceptions
Loan Loss Provisioning
Recognition & Measurement of Financial InstrumentsClassification
IAS 39 Classification Rules
IFRS 9 Classification Rules
Reclassification Rules
Initial Recognition & Measurement
Initial Recognition
Initial Measurement
Regular Subsequent Measurement
Subsequent measurement at FVTPL
Subsequent measurement at FVOCI
Subsequent measurement at amortised cost
Special cases
Impairments of Financial Assets
IAS 39 impairment rules
IFRS 9 impairment rules
Derecognition Criteria for Financial Assets
Accounting Treatment of Asset Transfers
Derecognition Criteria for Financial Liabilities
Hedge Accounting
Risk Management in Practice
Issues when Accounting for Hedging Relationships
Hedge Accounting according to IFRS 9
Risk Conceptions
Types of hedging relationships
Qualifying criteria
Fair Value Hedge Accounting
Cash Flow Hedge Accounting
Hedge Accounting according to the Full Fair Value Model