DERIVATI

The derivatives are one of the most innovative and complex branches of the financial market, the name comes from the fact that they are "derived" from underlying assets such as stocks, contracts, swaps, and even with other measurable events, not financial correlated such as weather. Derivatives with cash, stocks, and debt are one of the categories of financial instruments and can be used to either mitigate risk and it's called “edging” or assume risk with the expectation of commensurate reward that is “speculation”. According to the most recent data from the Bank for International Settlements, the total notional amounts outstanding for the derivatives market is an estimated $542,4 trillion. In periods of uncertainty, derivatives have outstanding importance, the last pandemic crisis shattered the financial market, the wise use of derivatives means protection against this though time and, under the point of view of speculation, a lot of money. In this paper, there is an analysis of how firms have to account for derivatives, what standard they have to apply, what kind of derivatives there are, how the market is regulated focusing mainly on derivatives based on exchange rates and then research about the impact on the financial statement of derivatives. In particular, we take operations from 2000 to 2005 taken from real pathologic expertise, from year to year is shown how the impact of this operation on the financial statements (how they affect the balance sheet and income statement). For each year there will be three main methods of accounting: fair value at the end of the year, value based on the BCE bulletin, and a mean of historic value to see which one is the most precise.