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Derivative Disclosures Project

Friday, December 8, 2006

The objective of the Derivative Disclosures project is to provide guidance on enhanced disclosure requirements related to derivatives accounted for in accordance with FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities”. Additionally, the project is expected to reconsider the existing disclosure requirements under Statement 133 for relevance and applicability. An exposure draft entitled “Disclosures about Derivative Instruments and Hedging Activities” was issued on December 8, 2006. A copy of the exposure draft can be found below.

IMA’s Financial Reporting Committee submitted a comment letter that addressed all of the pertinent issues in the exposure draft. The letter addressed 4 major concerns: 1) Need for more principles-based disclosures; 2) Excessive interim disclosures; 3) Disclosure of derivative notional amounts not efficient; 4) Gross versus net presentation of derivative positions. A copy of the letter can be found on IMA’s website.

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