FINANCIAL DERIVATIVES AND TOTAL PROFIT STATEMENT

Abstract

The accounting registration of the operations to cover risks generates practical and especially theoretical difficulties to be properly reflected in the attempt to respect the criteria recognized in the different theoretical references. The postponement of the operation’s results to cover cash flow, searching for the symmetry between the results of the covered and the covering operation, goes directly against the definition of revenue and expense, and the proper place for its accounting. This type of operation, which is temporarily registered in the shareholders’ equity, and then reclassified in the account of results, deforming its informative content. The preparation of a Statement of Shareholders’ Equity is a solution for the possibility of preparing an Income Statement. The present paper intends to build a theoretical analysis of the implications of the new model.