In the late 1990s, international statistical experts confirmed that financial derivatives should be treated as financial assets and that transactions in financial derivatives should be reported as separate transactions rather than as integral parts of the values of underlying transactions or of financial assets to which some derivatives are linked as hedges. Therefore, to parallel revisions made to the System of National Accounts (1993), an addendum and amendments to the fifth edition (1993) of the Balance of Payments Manual (BPM5) were prepared and published, in early 2000, as a supplement entitled Financial Derivatives. This supplement comprises two parts. Part I contains a new chapter in which the features of financial derivatives and treatments appropriate for specific derivatives were described. Part II consists of modifications to those portions of the BPM5 that pertain to financial derivatives. The revisions are shown by means of shading and strikeout. Financial Derivatives is an essential component of the BPM5.Streams of interest payments resulting from swap arrangements are recorded in the financial account as transactions in ... through a foreign currency derivative contract is agreed upon by the counterparties when the terms of the contract are established. ... In other words, if the value of the currency received exceeds that of the currency paid, a reduction in a financial derivative asset (a credit) is recorded.
|Title||:||Financial Derivatives: A Supplement to the Fifth Edition of the Balance of Payments Manual|
|Author||:||International Monetary Fund|
|Publisher||:||International Monetary Fund - 2000-05-10|