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Wiley GAAP for Governments 2013: Interpretation and Application of Generally Accepted Accounting Principles for State and Local Governments by Warren Ruppel

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CHAPTER 13

DERIVATIVE INSTRUMENTS

Introduction

Scope

Recognition and Measurement of Derivative Instruments

Hedging Derivative Instruments

Evaluating the Effectiveness of a Hedge

Methods for Determining the Effectiveness of a Hedge

The Hedgeable Item Is an Existing or Expected Financial Instrument

Consistent Critical Terms Method

Interest rate swaps—cash flow hedges

Interest rate swaps—fair value hedges

Forward contracts

Quantitative Methods

Synthetic Instrument Method

Dollar-Offset Method

Regression Analysis Method

Cash flow hedges

Fair value hedges

Other Quantitative Methods

The Hedgeable Item Is an Existing or Expected Commodity Transaction

Consistent Critical Terms Method

Commodity swaps—cash flow hedges

Commodity swaps—fair value hedges

Forward contracts

Quantitative Methods

Synthetic Instrument Method

Dollar-Offset Method

Regression Analysis Method

Cash flow hedges

Fair value hedges

Other Quantitative Methods

Hybrid Instruments

On-behalf payments included in derivative instrument payments

Effective Date and Transition

Synthetic Guaranteed Investment Contracts

Notes to the Financial Statements

Summary Information

Hedging Derivative Instruments

Objectives

Terms

Risks

Hedged debt

Other quantitative method of evaluating effectiveness

Investment Derivative Instruments

Contingent Features

Hybrid Instruments

Synthetic Guaranteed Investment Contracts

Summary

INTRODUCTION

The GASB issued Statement 53, Accounting and Financial Reporting for Derivative Instruments (GASBS 53), to provide ...

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