Question

FASB ASC Research Case 11-3 –Accounting for Derivatives

SFAS No. 133 was one of the most complex standards ever issued by the FASB. As a result, numerous implementation guidelines have been issued. Search the FASB ASC database to find three issues addressed by the EITF concerning accounting for derivatives. Cite and briefly summarize these issues.

Answer 1

The question deals with identifying three issues addressed by the EITF concerning the accounting for derivatives as per SFAS No. 133, and naturally falls under the subject of Business at the College level. Summarized, three such EITF issues are EITF Issue No. 07-5 related to multiple underlyings, EITF Issue No. 15-B on federal housing guarantees, and EITF Issue No. 16-C on contingent put and call options.

Step-by-step explanation:

The FASB ASC Research Case 11-3 concerns the accounting for derivatives, particularly in relation to SFAS No. 133, which was issued by the Financial Accounting Standards Board (FASB). Three issues addressed by the Emerging Issues Task Force (EITF) concerning derivatives include:

• EITF Issue No. 07-5: Accounting for Derivatives with Multiple Underlyings and EITF Issue No. 00-19, Accounting for Derivative Instruments Indexed to, and Potentially Settled in, a Company's Own Stock.
• EITF Issue No. 15-B: Accounting for the Effect of a Federal Housing Administration Guarantee.
• EITF Issue No. 16-C: Accounting for Contingent Put and Call Options in Debt Instruments.

These issues provide implementation guidelines and interpretations for complex derivative accounting scenarios that SFAS No. 133 could not address in detail. They aid accountants and financial professionals in correctly reporting derivatives in accordance with Generally Accepted Accounting Principles (GAAP).