Can anyone explain me the accounting of Interest rate swaps. Diagramatically I understand IRS is borrow @ floating rate of interest and lend @ Fixed rate of Interest or vice versa. i.e. pay floating and receive fixed or vice versa.
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Financial management
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Swaps are arranged so that the cost of funding whether fixed or floating can be reduced to minimum.....
Yes Nitesh I know you are right it reduces the cost of finances. But my query is which account to be debited and which account to be credited and by what amount ?
https://smallbusiness.chron.com/account-interest-rate-swaps-40942.H T M L
https://www.cs.trinity.edu/rjensen/Calgary/CD/ExamMaterial/exam5341/5341sp99/exam2/ex513a.htm
https://www.pwc.com/en_US/us/cfodirect/assets/pdf/dataline/dataline-2014-06-simplified-hedge-accounting-approach.pdf
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