- Perspective and Issues
- Definitions of Terms
- Concepts, Rules, and Examples
- ASC 825-20
Perspective and Issues
ASC 825, Financial Instruments, contains two subtopics:
- ASC 825-10, Overall, which has two subsections:
- General, which provides guidance on the fair value option 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, which provides guidance on financial instruments subject to 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”):
- All recognized financial assets and financial liabilities except for those listed in ASC 825-10-15-5 below:
- Firm commitments that would otherwise not be recognized at inception and that involve only financial instruments. An example is a forward purchase contract for a loan that is not readily convertible to cash. The commitment involves only financial instruments (the loan and cash) ...