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C » Topics » Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own StockThis excerpt taken from the C 8-K filed Oct 13, 2009. Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock
Derivative contracts on a company’s own stock may be accounted for as equity instruments, rather than as assets and liabilities, only if they are both indexed solely to the company’s stock and settleable in shares.
In June 2008, the FASB ratified the consensus reached by the EITF on Issue 07-5, “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (Issue 07-5). Under Issue 07-5, an instrument (or embedded feature) would not be considered indexed to an entity’s own stock if its settlement amount is affected by variables other than those used to determine the fair value of a “plain vanilla” option or forward contract on equity shares, or if the instrument contains a feature (such as a leverage factor) that increases exposure to those variables. An equity-linked financial instrument (or embedded feature) would not be considered indexed to the entity’s own stock if the strike price is denominated in a currency other than the issuer’s functional currency.
Issue 07-5 is effective for Citigroup on January 1, 2009, and is not expected to have a material impact.
This excerpt taken from the C 10-Q filed Aug 7, 2009. Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock EITF Issue 07-5, "Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock" (ASC 815-40). This excerpt taken from the C 10-Q filed May 11, 2009. Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock EITF Issue 07-5, "Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock." These excerpts taken from the C 10-K filed Feb 27, 2009. Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock Derivative contracts on a company’s own stock may be accounted for as equity instruments, rather than as assets and liabilities, only if they are both indexed solely to the company’s stock and settleable in shares. In June 2008, the FASB ratified the consensus reached by the EITF on Issue 07-5, “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (Issue 07-5). Under Issue 07-5, an instrument (or embedded feature) would not be considered indexed to an Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock Derivative contracts on a company’s own stock may be accounted for as equity instruments, rather than as assets and liabilities, only if they are both indexed solely to the company’s stock and settleable in shares. In June 2008, the FASB ratified the consensus reached by the EITF on Issue 07-5, “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (Issue 07-5). Under Issue 07-5, an instrument (or embedded feature) would not be considered indexed to an | EXCERPTS ON THIS PAGE:
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