n NISM Certifications
NSM General NISM
Medium

What is true as per ICAI guidance on accounting for derivatives?

Practice question from NISM Series I - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    All derivatives should be recognized in balance sheet

  2. B

    All derivatives must be at zero value

  3. Derivatives contracts that are unsettled remain off-balance-sheet items

    Correct answer

  4. D

    All derivatives must be accounted at book value

Why this is the answer

Unsettled derivatives are off-balance-sheet until settlement.

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