More on convergence on embedded derivatives
24 Feb 2006
As noted in our news story of 21 February 2006, FASB has issued Statement of Financial Accounting Standard No.
155 Accounting for Certain Hybrid Instruments that allows financial instruments with embedded derivatives to be accounted for as a whole at fair value through profit and loss. This option eliminates the need to separate the derivative from its host contract. A similar accounting option was added to IAS 39 as part of the Fair Value Option Amendments to IAS 39 in June 2005. Deloitte (United States) has published a special edition of the (PDF 113k) to explain the key concepts in Statement 155. Additional information, in question and answer format, is included in an Appendix to the newsletter.