Accounting for currency derivative instruments based on fair value measurement at credit institutions in Vietnam

Abstract

According to International Accounting Standard, currency derivative instruments are recognized in consideration of fair value measurement. In Vietnam, the recognition of currency derivative instruments has not taken fair value measurement into account. Hence, there is a significant gap between the Vietnamese accounting practice and international accounting standard in the recognition of financial instruments, particularly currency derivatives. This paper describes and analyzes the methods which are applied to recognize currency derivative instruments at credit institutions in Vietnam. Also, some suggestions including using fair value measurement for improving the accounting process of currency derivatives at these credit institutions are discussed.