Disclosure Requirements

Objectives, strategies, and magnitudes relevant for using derivatives, whether for hedging or for speculation, must be disclosed. Additional disclosures are also mandated when hedge relations apply (815-10-50, 815-25-45, 815-25-50, and 815-30-45).

Each of the following must be disclosed:

  • The context needed to understand intended hedge objectives—i.e., how the derivatives affect the entity’s financial position, financial performance, and cash flows
  • The accounting treatment applied in connection with derivative transactions, for both the hedged item and the hedging derivative when hedge accounting is applied
  • The location of the fair values of the amounts of derivatives reported in the statement of financial performance or the statement of financial positions—reported on a gross basis, presented as assets or liabilities and segregated by market segment (e.g., interest rate, FX, commodity, or other)
  • The location and amount of the gains and losses on any hedging derivative and related hedged items reported in the statement of financial performance or the statement of financial position
  • Identification of effective vs. ineffective outcomes, as well as components of results that had been excluded from hedge effectiveness consideration
  • The net gain or loss recognized in earnings when a firm commitment no longer qualifies as a hedged item in a fair value hedge
  • For cash flow hedges, a description of the conditions that will result in the reclassification of accumulated other comprehensive income into earnings and a schedule of the estimated reclassification expected in the coming 12 months
  • For cash flow hedges except hedges of variable interest rate exposures, the maximum length of time which hedging is anticipated
  • The amount reclassified into earnings as a result of discontinued cash flow hedges because associated forecasted transactions are no longer probable