Derivative instruments and investment classification

Reference no: EM1344731

a) Write down the differences between traditional and derivative instruments. Why do companies use derivative instruments? Are derivatives a good investment?

b) How do the various classifications of investments affect financial statements? What is the rationale behind the different accounting methods for the various investment classifications? Which is more important when determining the accounting method for securities, influence, or ownership? Explain why.

Reference no: EM1344731

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