Question

CE 17.2 What guidance does the SEC give for disclosures regarding accounting policies used for derivatives?

CE17.3 When would an investor discontinue applying the equity method in an investment? Are there any exceptions to this rule?

CE17.4 For balance sheet purposes, can the fair value of a derivative in a loss position be netted against the fair value of a derivative in a gain position?

Answer 1

As per FASB, ASC 235-10-S99-1 (Notes to Financial Statements, SEC Materials) provides the disclosures related to the accounting policies used for derivative commodity instruments and derivatives financial instruments; and also methods of applying such policies that materially impact the determination of cash flows, financial position, or results of operation. The derivatives would include:

-- Types of derivative commodity instruments and derivative financial instruments accounted for under these methods

-- Discussion for each method that account for derivative commodity instruments and derivative financial instruments

-- The criteria required to be satisfied for the accounting method applied

-- Accounting method applied when the specified criteria in paragraph (n)(3) of this section are not fulfilled

-- Method applied to account for terminations of derivatives designated as derivatives or hedges applied to impact directly or indirectly the fair values, terms, or cash flows for a designated item

As per policy we have to answer first question