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(PDF) Quick Reference on Ind AS 109, Financial Instruments

Download Quick Reference on Indian Accounting Standard (Ind AS) 109, Financial Instruments


Ind AS 109: Financial Instruments

The objective of Ind AS 109 is to establish principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing and uncertainty of an entity’s future cash flows.


This Standard should be applied by all entities to all types of financial instruments except:

(a) interests in subsidiaries, associates and joint ventures other than those that are accounted for as per this standard in accordance with the permission given by Ind AS 110, Ind AS 27 or Ind AS 28.

(b) rights and obligations under leases to which Ind AS 116 Leases applies. However, lease receivables are subject to the derecognition and impairment requirements of Ind AS 109, lease liabilities are subject to the derecognition requirements of Ind AS 109 and derivatives that are embedded in leases are subject to the embedded derivatives requirements of Ind AS 109.

(c) employers’ rights and obligations under employee benefit plans, to which Ind AS 19, Employee Benefits applies.

(d) financial instruments issued by the entity that meet the definition of an equity instrument.

(e) rights and obligations arising under (i) an insurance contract or (ii) a contract that is within the scope of Ind AS 104 contains a discretionary participation feature.

(f) any forward contract to buy or sell an acquiree that will result in a business combination within the scope of Ind AS 103.

(g) loan commitments other than those which entity designates as financial liabilities at fair value through profit or loss, loan commitments that can be settled net in cash or by delivering or issuing another financial instrument and commitments to provide a loan at a below-market interest rate.

(h) financial instruments, contracts and obligations under share-based payment transactions to which Ind AS 102, Share-based Payment applies except contract to buy/sell non-financial assets which are within the scope of this standard.

(i) rights to payments to reimburse the entity for expenditure that it is required to make to settle a liability that it recognises as a provision in accordance with Ind AS 37.

(j) rights and obligations within the scope of Ind AS 115, Revenue from Contracts with Customers, that are financial instruments, except for those that Ind AS 115 specifies are accounted for in accordance with this Standard.

(k) Contracts to buy or sell a non-financial item which cannot be settled net in cash or another financial instrument, or by exchanging financial instruments.

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