ASC 815-10-50 (FAS 161) Derivatives Disclosure

Released by the Financial Accounting Standard Board (FASB) in 2008, ASC 815-10-50 (previously FAS 161) brought a new level of transparency to financial reporting related to derivatives and hedging activities.  ASC 815-10-50 improves the quality of financial reporting by requiring enhanced disclosures that better convey the purpose of a company’s use of derivatives in terms of the risk it intends to manage.   By requiring additional information about how and why derivative contracts are being used, ASC 815-10-50 is designed to give investors a more accurate picture of an entity’s financial position.

DerivActiv is a leading provider of derivative management services, including independent valuations of derivatives.  We can assist companies and their auditors with ASC 815-10-50 compliance.  A DerivActiv representative can be reached at 1-866-200-9012

ASC 815-10-50 amends and expands ASC 815 (previously known as FAS 133), Accounting for Derivative Instruments and Hedging Activities.  ASC 815 established the accounting requirements for derivatives and hedging activities.  ASC 815-10-50 changes the disclosure requirements of ASC 815 by providing a greater understanding of:

• How and why an entity uses derivatives; and
• How an entity’s derivatives and hedging activities affect their financial position and cash flows

In an effort to comply with the above objectives, ASC 815-10-50 requires the following disclosures:

• A discussion on the company’s objectives and strategies for using derivatives;
• The current fair market value of the company’s derivative positions;
• Any contingent credit-related features of the company’s derivative positions;
• Location and amounts of derivatives in a company’s financial statement;
• Sensitivity of the portfolio to market changes.

Call us today at 1-866-200-9012 for help with your financial statement disclosures for derivative instruments.