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Accounting for derivatives—the FASB begins to move from disclosures to recognition and measurement
Author(s) -
Munter Paul
Publication year - 1995
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970060405
Subject(s) - accounting , fair value , financial instrument , business , balance sheet , financial accounting , derivative (finance) , actuarial science , accounting information system , finance
In October 1994, the Financial Accounting Standards Board (FASB) issued SFAS No. 119, Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments, as a part of its ongoing financial instruments deliberations. SFAS No. 119 draws on the disclosure requirements in SFAS No. 105, Disclosure of Information about Financial Instruments with Off‐Balance‐Sheet Risk and Financial Instruments with Concentrations of Credit Risk, and SFAS No. 107, Disclosures about Fair Value of Financial Instrumenta SFAS Nos. 105 and 107 established disclosure requirements for financial instruments.1 SFAS No. 119 expands these requirements to apply to derivative financial instruments as well. The FASB is now in the process of developing recognition and measurement criteria for derivatives. One scenario would call for the recognition and measurement provisions to be based on the disclosure requirements found in SFAS No. 119. Thus, in this article, we first examine the provisions of SFAS No. 119 and then discuss the accounting provisions currently being debated by the FASB.