FASB Summary of December 22, 1999 Board Meeting Discussion

FASB: Summary of December 22, 1999 Board Meeting Discussion

Derivatives Implementation Group

Summary of December 22, 1999 Board Meeting Discussion on Statement 133 Implementation Issues

Agenda decision-amendment of Statement 133. The Board authorized the staff to analyze the following six issues that could be considered in a possible limited-scope project that might result in either an amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, or modifications in cleared conclusions resulting from the Derivatives Implementation Group process:

  • Hedging the Risk-Free Interest Rate
  • Normal Purchases and Normal Sales Exception
  • Spot-Forward Rate Difference in Foreign Currency Hedges
  • Hedging with Intercompany Derivatives (Central Treasury)
  • Partial-Term Hedging
  • Option Hedges.

The Board also began discussions relating to the guidance in Statement 133 Implementation Issue No. E1, "Hedging the Risk-Free Rate." Constituents had raised concerns that the concept of market interest rate risk and credit risk as defined in Implementation Issue E1 differs from the common understanding of those risks by market participants. The Board did not make any decisions regarding the guidance in Implementation Issue El and instructed the staff to continue examining the issue.