CFM21010 - Accounting for corporate finance: key concepts: overview
There exists a number of different accounting standards that govern the accounting for financial instruments, depending on the accounting framework applied by a company.
Fortunately, there are a number of similarities between the standards. This section explains the common areas. In particular, it covers:
- Key concepts (CFM21030): IFRS, New UK GAAP and Old UK GAAP (including FRS 26) share similar definitions and key concepts.
- Liabilities and equity (CFM21200): All the main accounting standards share similar rules governing whether a particular instrument should be classified as a liability, as equity or as containing both liability and equity components (‘compound instruments’).
- Offsetting (CFM21300): All the main accounting standards share similar rules governing whether asset and liability balances can be offset.
Differences exist however with the rules which govern ‘classification and measurement’. CFM21410 sets out the different accounting policy choices available under the different accounting frameworks for the classification and measurement of financial instruments and provides links to the relevant sections of the manual.
Detailed guidance explaining the accounting rules in particular areas also exists. The specific topics covered are: