FAS 133: routine or ruinous?

The Association of Finance Professionals, a 14,000-strong group of corporate treasurers and finance officials, gave Risk an exclusive look at its just-completed member survey on the implementation and consequences of FAS 133. Two years after the controversial accounting regulation came into effect, how are corporations coping?

Two years ago, many predicted that the US Financial Accounting Standards Board’s (FASB) much-criticised derivatives accounting rule – FAS 133 – would force companies to slash their use of derivatives. But a survey of 175 corporates with revenues of between $1 billion and $5 billion, released this month, shows that most have not done so. However, corporate use of exotic hedging tools – the instruments most adversely affected by the rule – remains minimal.

The Maryland-based Association of Finance