Demystifying Derivatives: Essential Concepts for CPAs (Course Id 2404)

• Who is this course for?
  This course is designed for CPAs and anyone needing Continuing Professional Education (CPE), particularly those interested in gaining a foundational understanding of derivatives in financial management.

• What is this course about or what problem does this course solve?
  The course addresses the need for CPAs to understand derivatives by explaining their types, valuation, strategic role in risk management, and impact on financial reporting.

• How can the knowledge from this course be used?
  Learners can apply the knowledge to identify derivative types, recognize their role in managing financial risk, and understand their implications in financial statements.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  Understanding derivatives is crucial for accurate financial reporting and strategic risk management, making this course valuable for professionals who interpret or prepare financial statements.

• When is this course relevant or timely?
  Released in 2024 and revised in November 2024, the course is up-to-date and relevant for professionals seeking current knowledge on derivatives in today’s financial environment.

• How is a course like this consumed or used?
  This course is delivered through QAS self-study in a text-based format, requiring no prerequisites or additional materials, and includes review questions and a final exam to earn CPE credit.

This course provides CPAs with a general understanding of derivatives in financial management. Participants will explore the fundamentals of derivatives, their strategic role in risk management, and their practical applications. The course specifically covers the various types of derivatives, their valuation, and their implications for financial reporting.

NASBA QAS - Text - NASBA Registry - 2404

Course Learning Objectives

• Identify the various types of derivatives and their key characteristics.
• Recognize the strategic role of derivatives in financial risk management.
• Determine the financial reporting implications of using derivatives in an organization's financial statements.

Chapter 1 - Demystifying Derivatives: Essential Concepts for CPAs

Course Learning Objectives

Course Overview

Introduction

What Are Derivatives?

Basic Concepts

Underlying Asset

Types of Derivatives

Hedging vs. Speculation

Leverage

Margins

Strike Price and Expiration Date

Premium

In-the-Money (ITM), At-the-Money (ATM), Out-of-the-Money (OTM)

Derivative Markets

Risk Management

Applicable Regulations

Review Questions

Why do Companies use Derivatives?

Conclusion

Review Questions

Glossary of Key Terms