Application of Market Mechanism and Readily Convertible to Cash Subsequent to the Inception or Acquisition of a Contract
- Topics:
- Valuation
- Tags:
- Acquisition,
- Contract,
- Derivative,
- Finance,
- Financial,
- Financial Accounting,
- Financial Accounting Foundation,
- Financial Accounting Standards Board
- Source:
- Financial Accounting Foundation
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Overview: This article talks about the FASB Statement No.149 for the amendment of statement 133 on derivative instruments and hedging activities and FASB Statement No.150 for accounting certain financial instruments with characteristics of both liabilities and equity. If a contract ceases to be a derivative pursuant to Statement 133 and an asset or liability had been recorded for that contract, the carrying amount of that contract becomes its cost basis and the entity should apply other generally accepted accounting principles that are applicable to that contract prospectively from the date that the contract ceased to be a derivative. If the derivative contract had been designated in a cash flow hedging relationship and a gain or loss is recorded in accumulated other comprehensive income, then provisions of paragraphs 31 and 32 of Statement 133 should be applied accordingly. Read the article to get the details of the provisions of the FASB.
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Format: HTML | Date: Jun 2003 | Pages: 1
