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GASB 53 ReportingGASB 53 requires that governmental entities provide additional disclosure in their financial statements about their use of hedging derivative instruments. Governmental entities are required to include information about the purpose or objective for entering into the derivative, the terms of the derivative, the net cash flows (if the hedged item is debt) and the risks that the governmental entity is exposed to by its use of the derivative.DerivActiv helps governmental entities sort through the disclosure requirements and provides governmental entities with sample language for these new disclosures. MuniMarket Pulse Podcast on GASB 53To learn more about GASB 53 and the requirements for reporting, MuniMarket Pulse has produced an audio podcast interview with Jim Towne, Senior Vice President of DerivActiv on the subject. Listen Here.
The governmental entity must identify the risks that it is facing and highlight those risks. Some of the common risks associated with derivatives are termination risk, credit risk, interest rate risk, basis risk, rollover risk, market access risk and foreign currency risk. These risks will be highlighted and defined in the disclosures and specifically addressed for each derivative or type of derivative contract covered. Risks that must be disclosed in the financial statements under GASB 53 are:
If you are interested in learning more about GASB 53 reporting, you can download a GASB 53 white paper here. |
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GASB 53 Derivatives GASB 53 Disclosure Requirments GASB 53 Effective Date GASB 53 Fair Value GASB 53 Guidance GASB 53 Hedging Derivatives GASB 53 Overview GASB 53 Quantitative Methods GASB 53 Reporting GASB 53 Services |
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