FASB Amends the Definition of a Derivative and Statement 133 to Provide for More Consistent Accounting.
NORWALK, Conn.--(BUSINESS WIRE)--May 1, 2002
Today the Financial Accounting Standards Board Financial Accounting Standards Board (FASB)
Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). (FASB FASB
See: Financial Accounting Standards Board
See Financial Accounting Standards Board (FASB). ) issued an Exposure Draft, Amendment of Statement 133 on Derivative Instruments Derivative instruments
Contracts such as options and futures whose price is derived from the price of an underlying financial asset. and Hedging Activities.
The Exposure Draft amends AMENDS. A satisfaction, given by a wrong doer to the party injured for a wrong committed. 1 Lilly's Reg. 81.
2. By statute 24 Geo. II. c. 44, in England, and by similar statutes in some of the United States, justices of the peace, upon being notified of an Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, to clarify the definition of a derivative. A copy of the Exposure Draft is available on the FASB's website at www.fasb.org. The comment period concludes on July 1, 2002.
In connection with Statement 133 Implementation Issue No. D1, "Application of Statement 133 to Beneficial Interests in Securitized securitized
Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. Financial Assets Financial assets
Claims on real assets. ," the Board addressed issues related to the accounting for beneficial interests in securitized financial assets, such as beneficial interests in securitized credit card receivables. In resolving those issues, the FASB decided that an amendment was needed to clarify the definition of a derivative, as set forth in Statement 133.
The purpose of the Exposure Draft is to improve financial reporting by requiring that financial contracts with comparable characteristics be accounted for in the same way. The Statement would clarify under what circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact.
2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or a financial contract -- either an option-based or non-option-based contract -- with an initial net investment would meet the characteristic of a derivative discussed in paragraph 6(b) of Statement 133. The FASB believes the proposed change will produce more consistent reporting of financial contracts as either derivatives or hybrid financial instruments.
The proposed effective date for the accounting change is the first day of the first fiscal period beginning after November 15, 2002, which, for calendar year end companies, will be January 1, 2003.
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Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. . Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors and others rely on credible, transparent and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.
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