Wiley GAAP 2015: Interpretation and Application of Generally Accepted Accounting Principles 2015

Chapter 50ASC 825 FINANCIAL INSTRUMENTS

PERSPECTIVE AND ISSUES

   Subtopics

   Scope and Scope Exceptions

   Overview

DEFINITIONS OF TERMS

CONCEPTS, RULES, AND EXAMPLES

   ASC 825-10-25, Financial Instruments: The Fair Value Option

   Financial statement presentation and disclosure

PERSPECTIVE AND ISSUES

Subtopics

ASC 825, Financial Instruments, contains two Subtopics:

• ASC 825-10, Overall, which has two Subsections:
  • General, which provides guidance on credit losses on financial instruments with off-balance-sheet credit risk and some disclosures about financial instruments
  • Fair Value Option, which provides guidance on the circumstances under which entities may choose the fair value option and the related presentation and disclosure requirements
• ASC 825-20, Registration Payment Arrangements.

Scope and Scope Exceptions

The following items are eligible for the fair value option (also see the chapter on ASC 820 – the summary table in the section entitled “The Mixed Attribute Model”):

1. All recognized financial assets and financial liabilities except
   1. Investments in subsidiaries required to be consolidated by the reporting entity
   2. Interests in variable interest entities required to be consolidated by the reporting entity¹
   3. c. Employers' and plans' obligations (unfunded or underfunded liabilities) or assets (representing net overfunded positions) for
      1. 1. Pension benefits
      2. 2. Other postretirement benefits (including health care and life insurance benefits)
      3. 3. Postemployment benefits ...