If a proportion of the derivative instrument
is designated and qualify in as a hedging instrument and a proportion is not designated and qualifying as a hedging instrument, an entity would allocate the related amounts to the appropriate categories within the disclosure table.
Definition of derivative instruments
focusing on the distinguishing characteristics of a derivative instrument
--settlement factors, leverage, and net settlement;
The new standard provides specific criteria that governments will use to determine whether a derivative instrument
will result in an effective hedge.
The net loss for the current quarter of 2006 included an operating loss of $2,421,000 and non-cash derivative instrument
income of $740,000.
Recognizing changes in the fair value of derivative instruments
in net income in each period during the existence of the derivative instrument
, rather than when the forecasted transaction is settled, will result in quarterly changes to previously reported AOCI, retained earnings, operating income and net income.
The primary effect of a change in classification of the derivative instrument
will be the inclusion of any increases or decreases in the fair value of non-terminated derivative instruments
in the calculation of the Company's net income for the period in which the increases or decreases in the fair value occur.
The standard requires that all derivatives, with certain exceptions, be recorded at their fair value as either an asset or a liability, and changes the previous accounting definition of a derivative instrument
, which focused on freestanding contracts such as options and forwards.
While the impact of the change in any reporting period can be significant, the overall impact on operating income, net income and EBITDA (earnings before interest taxes depreciation and amortization) over the life of each derivative instrument
will be the same.
2001, concludes that synthetic GICs meet Statement 133's definition of a derivative instrument
from the perspective of the issuer.
If certain conditions are met, an entity may elect to designate a derivative instrument
Northern enters into derivative instruments
to manage the price risk attributable to future oil production.
However, the Islamic finance industry needs to develop its own innovation phase and not imitate conventional derivative instruments
in order for IFIs to maintain their special status and Sharia-compliant approach, the report says.