This course develops a framework for understanding the nature, uses, and financial reporting of derivatives. The overriding theme used to deliver these concepts will be the accounting and financial reporting for financial institutions. Thus, the course will first focus on the operating and financial reporting issues in the banking system. It will then focus simultaneously on two major issues relating to derivatives using a series of cases. The first will be a discussion of contract specifications, business uses and valuation of the three main classes of derivatives: futures & forwards, swaps, and options. The second will be a discussion of the accounting for these types of derivatives, with emphasis on fair-value and cash-flow hedges. The course will highlight industry-specific use of derivatives from two perspectives: managing risks relevant to that industry and speculation. Spring term.