Beginning in 2001, forwards replaced collars as the most popular derivative instrument
. One potential reason for the increased popularity of forwards is that they are easier to monetize than collars and allow insiders to raise more cash than with a collar.
In February 2011, the Governmental Accounting Standards Board (GASB) issued an exposure draft (ED) on Derivative Instruments
: Application of Hedge Accounting Termination Provisions.
This allowed it to terminate an existing derivative instruments
at a one-off cost ofpounds 5m which could see it potentially become free of its stadium construction related debt as early as 2021.
If you extend the suitability concept to the derivative instrument
area, you may be talking about suitability of products being sold to sophisticated investors.
The use and complexity of derivative instruments
and hedging activities have increased significantly over the past several years.
FAS 119 encouraged, but did not mandate, companies to disclose quantitative information about the overall market risks associated with derivative instruments
The trouble starts when leverage is involved, when people take too great a risk because they don't understand the derivative instrument
Per ASC 815-10-10-1, all derivative instruments
should be measured at fair value.
* Embedded derivative instruments
, and when an embedded derivative instrument
results in a hybrid instrument;
To qualify for this specialized treatment, a derivative instrument
must meet certain criteria to prove that it is associated with the hedgeable item.
A derivative instrument
is therefore a financial tool, the value of which is derived from the value of an underlying asset.
It is helpful to explain the relationship between a derivative instrument
and a related asset or liability (such as a fixed-rate loan and a swap that is intended to convert it to a floating-rate loan), but it is important to show the two related items separately.
The only deferred outflows of resources and deferred inflows of resources mentioned in GASB 63 are the ones resulting from the change in the fair value of an effective hedging derivative instrument
GASB stated that other projects on the board's current agenda are expected to include provisions for recognizing deferred outflows of resources and deferred inflows of resources.
THE Securities and Exchange Board of India ( Sebi) on Friday banned foreign institutional investor ( FII) Societe Generale ( SocGen) from issuing or transacting in any fresh offshore derivative instrument
Different conclusions can be reached as to whether a contract should be accounted for as a derivative instrument
. There have been many examples of companies restating their financial statements because their initial judgment that called for derivative accounting subsequently proved to be incorrect.