FAS 161 Guidance

FAS 161 guidance distinguishes between derivatives used to manage risk and those that are used for other purposes.  By providing disclosures based upon each instrument’s underlying risk, users of financial statements will benefit from greater transparency about how and why entities utilize derivatives to manage their risks.

To receive FAS 161 guidance from an established provider of derivative management services, contact DerivActiv at 1-866-200-9012.

Under FAS 161 guidance, entities are required to disclose information that enables users of their financial statements to understand their volume of derivative activity.  Specifically, FAS 161 guidance requires tabular disclosures that detail the fair value amounts of derivatives and where they are reported on the balance sheet, as well as the amount of the gains and losses of the derivatives and where they are reported on the income statement..

FAS 161 requires a tabular format for disclosing the current fair market value of derivative positions, as well as their gains and losses.  Additionally, it requires companies to provide more information about specific credit risk features in their derivative positions and to provide cross references so readers can quickly locate information about particular derivative positions that the company holds.

FASB 161 Reporting Dates

Fiscal Year End	Quarterly Filers	Semi-Annual Filers	Annual Filers
2/28, 5/31, 8/31 and 11/30	3/31/2009	6/30/2009	12/31/2009
3/31, 6/30, 9/30, and 12/31	240	140	50
1/31, 4/30, 7/31, and 10/31	4/30/2009	7/31/2009	1/31/2010

To ensure timely, accurate and efficient implementation of FAS 161, entities need to begin evaluating their FAS 161 compliance now.  DerivActiv can work with an entity’s auditors and financial staff to ensure this happens.