|
|
|
|
|
|
|||
|
Integrated Fair Value ServicesDerivActiv, LLC, a leading provider of independent valuations for derivatives provides clients with a one-stop solution for meeting the new fair value process requirements imposed by Topic 820 (previously FAS 157).
Fair Value Measurements and Disclosures (Topic 820), previously know as FAS 157, was issued by FASB on September 15, 2006 and effective for fiscal years beginning after November 15, 2007. Topic 820 was amended in December 2009. Final amendments will effective for annual or interim reporting periods beginning after December 15, 2009 (with certain exceptions for Level 3 activity, which will be effective after December 15, 2010). DerivActiv utilizes sophisticated models and market information to help clients meet the disclosure requirements of Topic 820. Our valuation methods are approved by auditors. We can assist with security classification under Topic 820 and prepare quarterly and annual valuation reports. To speak to a Topic 820 expert, call at 1-866-200-9012. DerivActiv is an independent valuation company for derivatives and other financial instruments. We assist clients with Topic 820 disclosure. Our expertise covers a wide variety of financial instruments, including: Derivatives, Asset-Backed Securities, Side Pocket Transactions, Mortgage-Backed Securities, Pass-Throughs, Convertibles, Mezzanine Debt, Credit Linked Notes, Auction Rate Securities, Distressed Securities, Cash and Synthetic CDO and CDO² Tranches, Exotic OTC Options, Complex, and Illiquid Securities, and Structured Investment Vehicles.
Topic 820 Disclosure LevelsPrior to Topic 820, there wasn’t a standard definition of fair value and there was no guidance explaining the differences or giving uniform information on how to arrive at fair value. Topic 820 has changed that by standardizing and replacing all existing definitions with the following: “Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” As such, fair value represents the exit price of a transaction, not the entry price.Topic 820 states that assumptions which would normally be used by market participants in the pricing of the asset/liability should be used as the basis for fair value measurement. Topic 820 offers a framework consisting of a three tier hierarchy of inputs (Level 1, Level 2, and Level 3) to be used in determining the fair value of assets and liabilities for disclosure purposes. The following is a summary of the fair value hierarchy of inputs:
The amount of disclosure required by Topic 820 is dictated by the level of the inputs used for the pricing of an investment. Topic 820 expands the disclosure requirements for investments that use a high level of unobservable inputs (Level 3 inputs). The impact of earnings on Level 3 investments must be disclosed and changes in Level 3 investments must be reconciled between periods. If you are interested in learning more about Topic 820 (formerly FAS 157), you can download a Topic 820 white paper here. |
|
Topic 820 Amendments Topic 820 Application Topic 820 Definition of Fair Value Topic 820 Derivatives Topic 820 Disclosure Topic 820 Disclosure Example Topic 820 Disclosure Requirements Topic 820 Guidance Topic 820 Implementation Topic 820 Mark to Market Topic 820 Level 1 Topic 820 Private Equity Topic 820 Valuation Services |
|
|
|
|
|
Copyright © 2009 DerivActiv, LLC. All Rights Reserved
|