Wiley GAAP 2020

53 ASC 825 FINANCIAL INSTRUMENTS

• Perspective and Issues
  • Subtopics
  • Scope and Scope Exceptions
    • ASC 825-10.
    • ASC 825-20.
    • Overview
• Definitions of Terms
• Concepts, Rules, and Examples
  • ASC 825-10, Overall
    • Fair Value Option—Flexibility of Application.
    • Timing of the Election.
  • Financial Statement Presentation and Disclosure
• ASC 825-20, Registration Payment Arrangements
  • Recognition and Initial Measurement

PERSPECTIVE AND ISSUES

Subtopics

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 825-10-05-2)

• ASC 825-20, Registration Payment Arrangements, which provides guidance on financial instruments subject to registration payment arrangements.

Scope and Scope Exceptions

ASC 825-10.

The following items are eligible for the fair value option:

• 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) and would not ...