FASB Moves Closer To Proposing Guidance On Credit Derivatives, Hedging

April 30, 2008
FEI Summary

On April 30, 2008 the Financial Accounting Standards Board (FASB) voted to propose an amendment to two standards - FIN 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, and FAS 133,  Accounting for Derivative Instruments and Hedging Activities - to improve the disclosure of credit derivatives. The proposed amendments would be effective fiscal years ending on or after Nov. 15, 2008, the proposed FSP is expected to be issued by August, and a question in the notice to recipients will address practicality of the effective date. There will be a 30 day comment period on the proposed FSP.

Separately, FASB continued to redeliberate its proposed amendment to FAS 133 for hedging. The proposed effective date will be fiscal years beginning after June 15, 2009 and interim periods in those years. An Exposure Draft (ED) is expected by June 1, and the comment period will close August 15.

Additionally, FASB Chairman Robert Herz noted at the beginning of the meeting that the board will not pursue a project to issue further guidance defining public vs. nonpublic (private) entities.  

Further details are in this FEI summary.