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Division Name
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March 17, 2000
Table of Contents
Overview ............................2
Hedging the Benchmark
Interest Rate.......................2
Hedging Recognized Foreign
Currency Denominated
Instruments ........................4
Net Hedges of Intercompany
Derivatives..........................4
Normal Sales and Normal
Purchases Exception ..........4
Shortcut Method Extended 5
Conclusion..........................5
John F. Tierney
(212) 469 6795
john.tierney@db.com
David Folkerts-Landau
Managing Director, Head of
Global Markets Research
The Financial Accounting Standards Board (FASB) has issued for public
comment several amendments to FAS 133. They address issues that
have arisen as corporations prepare for FAS 133.
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Overview
The Financial Accounting Standards Board has issued a
proposed amendment to FAS 133 that would make
several changes that will be welcomed by most
corporations. The FASBs willingness to consider and
propose these amendments is a major concession on
their part.
The amendments are out for a public comment period
that ends April 2. We urge all corporations and
businesses affected by FAS 133 to review these
amendments, and to make their views known to the
FASB. This is the final opportunity to make changes to
FAS 133 before it goes into effect in June. We would
note that while the FASB is unlikely to make any further
major changes to either FAS 133 or the amendments
there is still room to air constructive comments and time
for the FASB to consider and perhaps implement them.
In this report, we review and critique the proposed
amendments, and provide our views on how several of
them could be further modified yet still conform to the
basic model of FAS 133 (a key decision criterion for the
FASB).
In summary the amendments:
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Conclusion
Again, we urge corporations to review the amendments,
and to provide comments to the FASB on additional
changes they would like to see. We acknowledge the
likelihood of significant changes or concessions are small
at this point in the process. But we would argue that the
comment period is a nothing ventured nothing gained
opportunity to let the FASB know about implementation
issues and constructive ideas to resolve them.
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