FASB Summary of October 10, 2002 Board Meeting Discussion

FASB: Summary of October 10, 2002 Board Meeting Discussion

Derivatives Implementation Group

Summary of October 10, 2002 Board Meeting Discussion on the Proposed Amendment to Statement 133

Financial instruments: derivatives implementation. At its October 10, 2002 meeting, the Board continued its redeliberations of issues raised in connection with the accounting for derivative instruments in the FASB Exposure Draft, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. Board members voted unanimously to clarify that only loan commitments that relate to originating loans with potential borrowers are included in the new paragraph 10(i) scope exception. The Board agreed that the related proposed scope exception in the Exposure Draft was not intended to apply to commitments to purchase or sell loans. The Board noted that commitments to purchase or sell loans, whether options or forward contracts, should be analyzed under the provisions of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, to determine if those commitments are subject to the requirements of that Statement.