Statement No. 133 Accounting for Derivative Instruments and Hedging Activities establishes accounting and reporting standards for derivative instrument embedded in other contracts and for hedging activities. The statement requires that an entity recognize all derivatives as either assets or liabilities in the statements of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as: A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment. A hedge of the exposure to variable cash flows of a forecasted transactions or A hedge of the foreign currency exposure a net investment in a foreign operation, an unrecognized firm commitment, an available for sale security or a foreign currency denominated forecasted transactions. a.. Evaluate Statement No.133 in terms of the conceptual framework. b. Define a derivative from an accounting perspective and provide at least three characteristics of a derivative. c. Name and describe three derivatives. d. Briefly summarize the statement. When was the implementation date of the statement?
Statement No. 133 Accounting for Derivative Instruments and Hedging Activities establishes accounting and reporting standards for derivative instrument embedded in other contracts and for hedging activities. The statement requires that an entity recognize all derivatives as either assets or liabilities in the statements of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as: A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment. A hedge of the exposure to variable cash flows of a forecasted transactions or A hedge of the foreign currency exposure a net investment in a foreign operation, an unrecognized firm commitment, an available for sale security or a foreign currency denominated forecasted transactions. a.. Evaluate Statement No.133 in terms of the conceptual framework. b. Define a derivative from an accounting perspective and provide at least three characteristics of a derivative. c. Name and describe three derivatives. d. Briefly summarize the statement. When was the implementation date of the statement?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Statement No. 133 Accounting for Derivative Instruments and Hedging Activities establishes accounting and reporting standards for derivative instrument embedded in other contracts and for hedging activities. The statement requires that an entity recognize all derivatives as either assets or liabilities in the
- A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment.
- A hedge of the exposure to variable cash flows of a
forecasted transactions or - A hedge of the foreign currency exposure a net investment in a foreign operation, an unrecognized firm commitment, an available for sale security or a foreign currency denominated forecasted transactions.
a.. Evaluate Statement No.133 in terms of the conceptual framework.
b. Define a derivative from an accounting perspective and provide at least three characteristics of a derivative.
c. Name and describe three derivatives.
d. Briefly summarize the statement. When was the implementation date of the statement?
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