Dataline: Accounting for centrally cleared derivatives Understanding the accounting implications of Dodd-Frank Title VII (No. 2013-30)

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Dataline 12/20/2013 by Assurance services
Dataline: Accounting for centrally cleared derivatives  Understanding the accounting implications of Dodd-Frank Title VII  (No. 2013-30)

At a glance

Dodd-Frank Title VII changed the trading requirements for certain derivatives, raising a number of financial reporting issues related to centrally cleared derivatives.

Dodd-Frank Title VII (Dodd-Frank) significantly changed the trading requirements for derivative instruments, such as mandating that certain derivatives be centrally cleared.

A number of financial reporting implementation questions have arisen as companies consider the Dodd-Frank requirements. These include determining fair value of centrally cleared derivatives, accounting for collateral, assessing the impact on hedge accounting, and determining the appropriate presentation (gross versus net).

This Dataline discusses the financial reporting implications of the new requirements, primarily focusing on end-users that trade in the affected derivatives and who do not qualify for the end-user exception.