Derivative Accounting – The Ways Out

Posted by & filed under Derivatives, Equity-Linked Transactions.

Over the last three days, I went through the accounting definition of a derivative. If you have an agreement, or embedded feature within an agreement, that meets the definition, then derivative accounting has entered your life. Unless, of course, one of the scope exceptions applies! And there are many. The vast majority of derivative accounting… Read more »

Derivative Settlement Alternatives

Posted by & filed under Derivatives, Equity-Linked Transactions.

Settlement alternatives, and the party that controls the settlement alternatives, figure significantly in determining the accounting treatment of an equity-linked freestanding or an embedded derivative. The pre-Codification guidance was contained primarily within EITF-0019, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company‚Äôs Own Stock. The Codification guidance is buried within ASC… Read more »