In this article, we examined IAS 39 “Financial Instruments: Recognition and Measurement” which superseded IAS 25 “Accounting for Investments” except with respect to land and buldings other tangible and intangible assets held as investment. IAS 39 establishes principles for recognising, measuring and disclosing information about financial instruments. IAS 39 is effective financial statements for financial years beginning on or after 1 January 2001.