Accounting Treatment of IRS

Tue, 27 Oct 2026 11:40:49 +0300

As regards to yesterday’s question on the accounting treatment of the Interest Rate Swap (IRS) cash flows, it depends on how the IRS is used. As a general rule, the IRS should be recognized on the balance sheet as a derivative asset or liability and measured at fair value (Mark-to-Market).
We start at a zero fair value and every time that a report is prepared, we record the change in the fair value of the IRS. If the IRS is used for hedging the effective % of the swap (i.e. the portion of the hedge) is initialy recorded in the “Other Comprehensive Income” item rather than the income statement. The rest is recorded in P&L.
This is a more technical accounting issue and is beyond the scope of our introductory course in Financial Management.

If you need further and more detailed references on the issue check IFRS, 9 which presents how corporations should classify and measure financial assets and liabilities, and various contracts.

Best regards,

Spyros

Assignment Presentations

Tue, 27 Oct 2026 10:53:23 +0300

Dear all,

I have just uploaded to teh "Documents" the presentation schedule.

We start next Monday, so please send me your Power point files by Sunday.

Also, I plan to upload each power point file to eclass, so the rest of the class can have access to the topic, references, etc., for further reading.

As you can see I allow for 15 minutes per topic, so please keep the perentations within the 10-15 minute limit.

If you cannot make it on the assigned day, please try to find a colleague that is willing to switch days with you, and let me know of any changes so I can update the list. If you cannot find anyone to switch let me know.

Best rgerads,

Spyros Spyrou

Ανακοινώσεις μαθήματος Financial Management (PT - MSc ISFM)

Accounting Treatment of IRS

Assignment Presentations