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.
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