Financial Instruments
Expected Credit Loss (ECL) Model
Why a lender now has to book a loss on a loan that's being repaid perfectly on time, every single month, without a single missed payment — just because the loan exists.
Hedge Accounting
Why an airline that locks in its jet fuel price months in advance can end up reporting a 'loss' on that smart, protective decision — unless it uses a specific accounting technique designed to stop that mismatch from happening.
Fair Value Hierarchy (Level 1, 2 and 3)
Why two investments on the same balance sheet, both labelled 'fair value', can carry wildly different levels of confidence — one priced off a stock ticker updated every second, the other based on a spreadsheet model nobody outside the company can fully verify.
Preference Shares — Equity or Liability?
Why something literally called a 'share', sitting in a company's own share capital register, can be accounted for as a LOAN on its balance sheet — not as part of shareholders' equity at all.
Convertible Bonds
Why a single bond, from the moment it's issued, has to be split into two completely different numbers on a company's balance sheet — part debt, part equity — even though the company only received one lump sum of cash.
Financial Guarantee Contracts
Why a parent company that simply promises a bank 'don't worry, we'll cover it if our subsidiary can't pay' has taken on a real, measurable liability of its own — even if the subsidiary never actually misses a single payment.
Derivatives & Mark-to-Market Accounting
Why a company that takes a bet on which way the rupee will move, rather than genuinely protecting itself against a real business risk, has to report the full swing of that bet through its P&L, every single quarter, win or lose.
Bank & NBFC Provisioning — IRAC Norms vs Ind AS
Why India's largest banks, holding trillions of rupees in loans, don't actually follow the same accounting rulebook as the NBFCs and other companies sitting right next to them in the same stock market index.