DerivActiv, LLC Revises FAS 157 White Paper to Include Current Information on Topic 820 Updates

    MINNEAPOLIS, MN, April 28, 2010 /24-7PressRelease/ -- DerivActiv, LLC, has recently published a white paper "Topic 820 Valuation of Derivatives" to include the new Topic 820 valuation framework. Topic 820 (formerly FAS 157) redefines fair value and replaces all previous definitions of fair value under GAAP. This new level of complexity associated with Topic 820 may require the users of derivatives to have unique modeling capabilities and access to market data to determine fair value. Download white paper here: www.derivactiv.com/WhitePapers.html.

In December, 2009, the Financial Accounting Standards Board (FASB) changed the name of FAS 157 to Topic 820. The name change was initiated during FASB's codification of its financial accounting standards, which now organizes the content into broad topical categories, such as Topic 820. The purpose of the codification is to create a single, online, authoritative source of U.S. Generally Accepted Accounting Principles (GAAP) and reorganize its contents to make it easier to update, research and use.

Under Topic 820, a three tier hierarchy of inputs is used to determine the fair value of assets and liabilities for disclosure purposes. "Our clients are facing increased scrutiny on how they are valuing and reporting their derivatives and other sophisticated financial instruments on their financial statements, and many of them need help determining fair value under Topic 820," said Jim Towne, Senior Vice President of DerivActiv. "We believe it's important to educate the public on the new ASC Topic 820 requirements by providing white papers and podcasts on the subject."

DerivActiv has been a provider of independent valuation services to corporate, governmental and non-profit clients and has been actively adding valuation services to meet the needs of its varied clients. "We started providing marl-to-market valuation services, threshold alerts, and FAS 133 hedge accounting to clients. As FAS 157 was implemented and then the recent update to Topic 820, we found that a more sophisticated methodology was necessary," said Towne. "We even advanced the ball further down the court with a soon-to-be released update on EITF-10-35 loan valuation under Topic 820."

Recently, in a podcast titled "FASB Topic 820's Relevance for Entities that Use Derivatives", Travis Quast, Vice President of DerivActiv and an expert on hedge accounting, stated that "Topic 820 sets a uniform definition of fair value and expands the disclosures about fair value measurements to be used in financial statements. It's relevant for entities that use derivatives since derivatives are required to be reported at fair value and it's also relevant for entities that issue debt and are required or choose to report that debt at fair value."

For more information on Topic 820, GASB 53 or other subjects on independent valuation, listen to MuniMarket Pulse or its sister podcasts CapitalMarket Pulse and MMA MuniCast, please visit http://podcast.derivactiv.com/.

About ASC Topic 820
Topic 820, formerly FAS 157, creates a new standard definition of "fair value," provides a methodology for determining the fair value of assets and liabilities (including derivatives and hedging products) by using a hierarchy of inputs (Level 1, Level 2, Level 3), requires using valuation techniques consistent with conventional approaches (market, income, and/or cost), and clarifies the need to include certain assumptions about risk, market illiquidity, and nonperformance risk in measuring fair value. A podcast on the subject can be found here: Listeners can download a podcast here: http://www.derivactiv.com/PodcastRpt.aspx?display=Travis_Quast_FASB_Topic_820_03-26-2010.

About DerivActiv, LLC
DerivActiv, LLC is the primary sponsor of MuniMarket Pulse and is a leading provider of web-based derivative valuation and other financial monitoring services, serving financial institutions, corporations, non-profits, and municipalities. DerivActiv provides daily valuations of financial products, including equity, currency and fixed income securities derivatives as well as a number of alternative investments. DerivActiv is used for FAS 133 and 161, Topic 820 (FAS 157) and GASB 53 compliance in financial statements, board and finance committee reports, and as an internal risk management tool. For more information call 1-866-200-9012, or visit the company's website at: www.DerivActiv.com.

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