• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Is this a hybrid instrument that should be separated?

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Is this a hybrid instrument that should be separated?

  • This topic has 4 replies, 2 voices, and was last updated 7 years ago by P2-D2.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • April 10, 2018 at 8:38 pm #446045
    professormoriarty
    Member
    • Topics: 1
    • Replies: 2
    • ☆

    If you have a so called “off-market derivative” – that is a derivative, for example an interest rate swap that has a negative value. I’ve been told these should be separated in two – into a loan component and a derivative that is “at-the-money” (value is equal to nil).

    Does this solution stem from IFRS 9 4.3.3? These derivatives are seen as a hybrid contract – that shall be separated? Please help me understand this…

    Thanks

    April 10, 2018 at 10:20 pm #446057
    professormoriarty
    Member
    • Topics: 1
    • Replies: 2
    • ☆

    Just to be clear, I mean a derivative that is off-market (has negative value) at inception

    April 11, 2018 at 9:10 pm #446239
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    I’m no expert on interest rate swaps with negative values (what does that even mean?) and not fully acquainted with “off-market derivatives” so I doubt I’d be able to answer this one.

    Sorry

    April 11, 2018 at 11:30 pm #446253
    professormoriarty
    Member
    • Topics: 1
    • Replies: 2
    • ☆

    Hi again!

    It just means that the terms of the swap are different to market terms, so that for one of the parties it has a positive value and for the other a negative value. This is balanced in some way, for example through a lump sum payment between the parties at inception, so in essence it’s a swap with a financing component

    April 15, 2018 at 5:11 pm #446726
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    I’d speak to the person who has told you that it should be separated as they’ll be able to explain. They sound to be much more knowledgeable than I am.

    Thanks

  • Author
    Posts
Viewing 5 posts - 1 through 5 (of 5 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • umangkumbhat on What is Assurance? – ACCA Audit and Assurance (AA)
  • ahmadhoney on How to register with ACCA?
  • John Moffat on Interest rate risk management (1) Part 5 – ACCA (AFM) lectures
  • osman-the-zephyr@ on MA Chapter 1 Questions Accounting for Management
  • adebusola on MA Chapter 1 Questions Accounting for Management

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in