An Analysis of Accounting Treatment for Agri-Commodity Derivatives Under IFRS

IFRS 7 and 9 have requirement, for recognition, measurement and disclosure of derivatives. Derivatives include futures and options for hedging foreign currency risks, interest rate risk, price risk etc. Derivatives include financial and commodity derivatives, commodity derivatives are of recent origin, they include commodity futures traded in commodity markets. The requirements under IFRS 7 and 9 can be applied to commodity derivatives. The aim of the present study is to codify the requirement, for recognition, measurement and disclosure of commodity derivatives by Agri-business and Agri-process companies. The data were collected from annual reports of sample companies. Research instrument consists of requirements of recognition, measurement and disclosure index which has been formulated as per IFRS . Data were collected by content analysis method and analyzed using descriptive statistics .The results of the study reveals that of the information of Agri-commodity derivatives recognition, measurement, disclosure in the annual reports is very low level