Financial Instruments accounting polices

In general

Firstly, any client with any of the following on the balance sheet: cash, debtors, investment or creditors (99.9% of clients), must include the Financial instruments accounting policy, and tick the sub-section titled “Financial assets and liabilities”.
Secondly, any client with any cash or debtors of any type (i.e. any basic financial instrument, again 99% of clients) must tick the sub-section titled “Basic financial assets”.
Thirdly, any client with any type of creditor (i.e. any basic financial liability, 99% of clients) must tick the sub-section titled “Basic financial liabilities”.
Any client that owns shares in another company as an investment or as part of a group should tick the sub-section titled “Investments”.
Finally, any client that owns shares as an investment which are publicly traded (Listed) and so held at fair value should tick the sub-section titled “Fair value measurement”.

There is to be no modification to the text in the financial instrument accounting policy. This includes: listing out types of instrument, removing certain sentences from the policy, or including any other wording that was in DAPA. The sections of the policy are correct and sufficient.

If a company decides to apply IAS 39 or IFRS 9 instead, this should be separately explained.

Specific guidance on the individual sub notes is set out below:

Accounting policy and standard wording	Help guidance
Basic financial assets receivable within one year, such as trade debtors and bank balances, are measured at transaction price less any impairment. Basic financial assets receivable within more than one year are measured at amortised cost less any impairment.	"Basic financial assets receivable within more than one year are measured at amortised cost less any impairment." is normally only needed if you have intercompany debtors
Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset expire or are settled, or the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.	Where used, please overwrite the generic wording suggested here to something that is specific.
Basic financial liabilities that have no stated interest rate and are payable within one year, such as trade creditors, are measured at transaction price. Other basic financial liabilities are measured at amortised cost.	Financial liabilities classified as payable within one year that have no stated interest rate are not amortised. But, for example, a finance lease or bank loan in its final year would have a stated interest rate, so it would continue to be amortised.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.	This will rarely apply to the majority of our clients and should be tailored to our clients when it does apply.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.	Wording here relates to small investments in unlisted companies.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge. Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.	This will rarely apply to the majority of our clients
The Company uses derivative financial instruments to reduce exposure to foreign exchange risk and interest rate movements. The Company does not hold or issue derivative financial instruments for speculative purposes. Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately [unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.] The Company does not apply hedge accounting.	The italics should only appear if the company is applying hedging.