This report reviews U.S. generally accepted accounting practices (GAAP) applicable to derivatives and hedging applications. Statement of Financial Accounting Standards no. 133, “Accounting for Derivative Financial Instruments and Hedging Activities” (FAS 133) was implemented originally in 1999. International Accounting Standard 39 (IAS 39) for international reporting became effective in 2001. Canadian Institute of Charted Accountants statements 3855 and 3865 (CICAs 3855 and 3865) became effective in 2006 for Canadian reporting.
Appendix 1 provides a high-level summary of the implications of these standards. While the standards applicable in different jurisdictions are a bit different, they generally align with the precedents established by FAS 133.
We focus on the application of FAS 133 to U.S. entities using exchange-traded derivatives such as those offered by CME Group; and, to over-the counter (OTC) derivatives.
CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.