GASB 53 Services for Governmental Entities

DerivActiv, LLC Announces GASB 53 Hedge Effectiveness Services for Governmental Entities

Governmental entities, from small municipalities to county and state governments are now required to determine hedge effectiveness for derivatives as required by GASB 53 if they are part of a governmental entity’s portfolio. DerivActiv’s powerful derivative management system provides these clients a streamlined process to meet GASB 53 requirements.

Minneapolis, MN - August 25, 2009 - DerivActiv, LLC, a leading provider of independent valuations for fixed income, currency and equity derivatives, private equity, CDOs and CMOs, and other fixed income securities to governmental entities, healthcare organizations, non-profits, corporations, banks, hedge funds and higher education clients, has expanded its services to include GASB 53 effectiveness testing of derivative products for governmental entities.

To meet GASB 53 requirements, DerivActiv has developed models to evaluate hedge effectiveness using all of the standard techniques required by the Governmental Accounting Standards Board (GASB). The results of these models have already been used by governmental entitities and the DerivActiv GASB 53 report process has been reviewed by accounting firms.

Under GASB 53, a governmental entity is required to determine annually whether a derivative is a hedging derivative instrument (it passes one of the tests outlined by GASB 53) or an investment derivative instrument (it fails all of the tests outlined under GASB 53). “We will help governmental entities perform the effectiveness tests and prepare their financial statement footnotes to provide the additional transparency required by GASB 53,” said Johan Rosenberg, president of DerivActiv. GASB 53 is required for all governmental entities with derivatives.

Given the growing need for independent valuations and transparency in all derivative transactions, DerivActiv will provide GASB 53 testing and compliance for all types of derivatives, including plain vanilla swaps, swaptions, knock-outs, CMS swaps, foreign currency swaps, commodities and other hybrid derivative structures.

DerivActiv is committed to working with all types of governmental entities including cities, counties, schools. hospitals, state agencies, public institutions and any other governmental body to address the desire for independence and transparency in the derivatives marketplace.