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For those entities applying FRS 105 with an accounting period beginning on or after 1 January 2016.

For those micro-entities that chose to apply FRS 105 there is no financial instruments accounting policy choice, they must follow the accounting requirements of Section 9.

Section 9 sets out the requirements for the recognition, derecognition, measurement and disclosure of financial assets and financial liabilities.

FRS 105 does not have the distinction between ‘basic� financial instruments and non-basic financial instruments as contained in FRS 102.

Examples of financial instruments that are within the scope of FRS 105 Section 9 are as follows:

• Cash;
• Trade debtors and creditors;
• Commercial paper and commercial bills held;
• Demand and fixed-term deposits with banks or similar institutions;
• Bonds, loans and similar instruments;
• Investments; and
• Derivatives (e.g. options, warrants, futures contracts, forward contracts and interest rate swaps).

The requirements of Section 9 of FRS 105 do not apply to certain financial instruments that are covered by other Sections of FRS 105. There are exceptions for Leases (Section 15), Employers� rights and obligations under employee benefit plans (Section 23), those financial instruments that fall within the definition of Share-based payments (Section 21), financial guarantee contracts (Section 16) and contingent consideration in a business combination, for the acquirer (Section 14).