Published: 11 Nov 2021

President University Major Association (PUMA) Accounting Study Program, President University (PresUniv), again held President University Accounting Day (PUAD) 2021 in the form of a national seminar. This online seminar was held on Friday (11/5) with the topic “Derivative, Speculative, or Investment Asset? From the Perception of Finance and Accounting”. This topic was brought by Dr. Josep Ginting, CFA., a lecturer in the Accounting Study Program as well as the Vice-Rector for Business Development at PresUniv, and Denies Gunawan, an alumnus of the PresUniv Accounting Study Program, batch 2005, who is also a finance specialist and is currently the Co-founder and Managing Director of PT Talenta Teknologi Indonesia.

In this webinar, Josep explained the meaning of derivatives, the history, and products. He explained, "Derivatives are one of the financial products used for hedging." He said that derivatives originated from traditional transactions since the industrial revolution, which began with a forward or forward contract, an agreement between companies. Then, after the industrial revolution, the forward contract became more varied and could even be used for investment. "With the forward contract, we can create investment agreements to set the price and availability of the underlying asset," said Josep. He explained how to calculate delivery contracts for investments and derivative products that developed along with the development of the capital market.

Meanwhile, Denies conveyed the meaning of financial derivatives. He said, “A derivative is a financial instrument in which a trader makes an agreement to exchange cash or an asset over time based on the underlying asset.” In the description, there are three characteristics of derivatives. There are, have fair value or changes in cash flows that depend on underlying variables, do not require a net initial investment or require but in smaller amounts, and can be settled in the future. Denies also explained the basic principles of accounting and the underlying variables in financial derivatives, such as interest rates, stock prices, indices, commodity prices, and foreign exchange rates. Not only that, at the end of the session, he also conducted some basic simulations through case studies, where participants were able to answer the questions given directly. (Silvia Desi Betrice, PR team. Photo: Silvia)