Wiley GAAP 2021, 2nd Edition

52ASC 825 FINANCIAL INSTRUMENTS

1. Perspective and Issues
   1. Subtopics
   2. Scope and Scope Exceptions
      1. ASC 825‐10
      2. ASC 825‐20
   3. Overview
2. Definitions of Terms
3. Concepts, Rules, and Examples
   1. ASC 825‐10, Overall
      1. Fair Value Option—Flexibility of Application
      2. Timing of the Election
   2. Financial Statement Presentation and Disclosure
4. ASC 825‐20, Registration Payment Arrangements
   1. 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 be recognized ...