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In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements. FAS 157 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The Statement applies under other accounting pronouncements that require or permit fair value measurements.

With regard to derivatives, FAS 157 clarifies that a fair value measurement should reflect nonperformance risk (the risk that the obligation will not be fulfilled). Because nonperformance risk includes the reporting entity’s credit risk, the reporting entity should consider the effect of its credit risk on the fair value of the liability in all periods in which the liability is measured at fair value. When derivatives are assets, the reporting entity should consider the effect of its counterparty’s credit risk on the fair value of the asset in all periods in which the asset is measured at fair value.

DerivActiv has received a SAS 70 Type II certification by an independent auditor.

DerivActiv can provide daily mid-market values as well as monthly or quarterly FAS 157 adjusted values.

For more information, call us at 866-200-9012 or click here to request a free demonstration.