Summary of Statement No. 105

Disclosure of Information about Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of Credit Risk (Issued 3/90)

Summary

This Statement establishes requirements for all entities to disclose information principally about financial instruments with off-balance-sheet risk of accounting loss. It is the product of the first phase on disclosure of information about financial instruments. This first phase focuses on information about the extent, nature, and terms of financial instruments with off-balance-sheet credit or market risk and about concentrations of credit risk for all financial instruments. Subsequent phases will consider disclosure of other information about financial instruments. The disclosure phases are interim steps in the Board's project on financial instruments and off-balance-sheet financing. Recognition and measurement issues are currently being considered in other phases of the project.

This Statement extends present disclosure practices of some entities for some financial instruments by requiring all entities to disclose the following information about financial instruments with off-balance-sheet risk of accounting loss:

The face, contract, or notional principal amount

The nature and terms of the instruments and a discussion of their credit and market risk, cash requirements, and related accounting policies

The accounting loss the entity would incur if any party to the financial instrument failed completely to perform according to the terms of the contract and the collateral or other security, if any, for the amount due proved to be of no value to the entity

The entity's policy for requiring collateral or other security on financial instruments it accepts and a description of collateral on instruments presently held.

This Statement also requires disclosure of information about significant concentrations of credit risk from an individual counterparty or groups of counterparties for all financial instruments.

This Statement is effective for financial statements issued for fiscal years ending after June 15, 1990.