Finance Sina homepage > Finance and Economics > Warrant dynamics > Warrant channel> text
 

The Ministry of Finance stipulates the accounting treatment method for securities companies to create warrants


http://finance.sina.com.cn 08:23, January 18, 2006 Panorama Network - Securities Times

News from our newspaper (trainee reporter Wang Jin) The Ministry of Finance recently issued the Interim Provisions on Accounting Treatment of Securities Companies' Creation of Warrants, which clearly stipulates the accounting treatment of securities companies' creation of warrants. So far, the controversial issue of warrant profit recognition has been given specific guidance.

According to the regulations, for the warrant issued by the securities firm, the securities firm shall, at the end of the accounting period, measure the shares that have been deposited in the special account of the Central Depository and Clearing Company for performance guarantee at fair value, and the changes in fair value shall be included in the investment
Capital gains. The warrants issued by securities firms shall be measured at the middle price of the warrants, and the difference between the middle prices at the end of the two accounting periods shall be included in the profits of the current period. If the closing middle price of the warrant significantly deviates from the value calculated and determined according to the B-S option pricing model, the securities firm shall measure it according to the value determined by the B-S model.

For the put warrants issued by securities companies, they shall be measured at the middle price of the put warrants at the end of the accounting period, and the difference between the middle prices of the two accounting periods shall be included in the current profits and losses. If the closing middle price of the put warrant significantly deviates from the value calculated and determined by the B-S option pricing model, the securities firm shall measure it according to the value determined by the B-S model.

For the call or put warrants created by the cancellation of the securities firm, the securities firm may record the difference between the amount received when the warrants are issued and the purchase price into the current profits.

The regulation does not give quantitative indicators for whether securities companies choose the middle price at the end of the period or the theoretical value when calculating warrant returns. Therefore, insiders believe that securities companies may choose the principle that is beneficial to them under the condition of compliance. At present, there is a big difference between the theoretical value and the actual price of some varieties, and some varieties even reach about 1 yuan. Therefore, different methods have a greater impact on the recognition of accounting profits by securities companies.

According to the statistics of Shanghai Stock Exchange, as of the end of last year, the number of warrants created by securities companies and still in circulation totaled 1.546 billion, including 908 million WISCO call warrants, 592 million WISCO put warrants and 46 million Guangzhou Airport warrants. The accounting treatment method of these warrants will directly affect the profits of securities companies in 2005.


Comment

Love Ask (iAsk. com) About 504,000 Article.


comment 】【 On shares and gold 】【 Favorite this page 】【 Watch stocks from time to time 】【 large in Small 】【 Watch news in various ways 】【 Print 】【 close


Comment board of Sina.com financial vertical and horizontal netizens Tel.: 010-82628888-5174 Welcome to criticize and correct

Sina Profile | About Sina | Advertising services | contact us | recruitment information | Website lawyer | SINA English | Member registration | Product Q&A

Copyright © 1996-2006 SINA Corporation, All Rights Reserved

Sina copyright