Derivatives and Hedge Accounting

Free CPA BAR (Business Analysis & Reporting) lesson in Technical Accounting and Reporting. 20 min read, ~3,034 words.

Derivative under ASC 815 must meet all three: underlying plus notional, little or no initial net investment, and net settlement; failing any one excludes derivative accounting. Embedded derivative requires bifurcation only when not clearly and closely related to the host and the hybrid is not measured at fair value through...