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Structure FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity SEC Accounting Series Release No. 268,



derivatives within a host contract (for example, bonds, insurance policies, and leases) that do not meet the definition of a derivative in its entirety. Specifically, subparagraph 12(c) of Statement 133 indicates that one of the three necessary criteria for bifurcation is that "a separate instrument with the same terms as the embedded derivative instrument would, pursuant to paragraphs 6–11, be a derivative instrument subject to the requirements of this Statement. " 1 1 The other two criteria in Statement 133 are (a) the economic characteristics and risks of the embedded derivative are not clearly and closely related to the economic characteristics and risks of the host contract and (b) the contract that embodies both the embedded derivative and the host contract is not remeasured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur. Copyright © 2005, Financial Accounting Standards Board Not for redistribution Page 12. Paragraph 11 of Statement 133 provides guidance to identify those contracts tha

Year: 2013
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