{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/815/45/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"815","topic_title":"Derivatives and Hedging","subtopic":"815-45","subtopic_title":"Weather Derivatives","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Nontrading Activities","paragraphs":[{"citation":"815-45-25-1","para":"25-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_C2FA9351-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An entity that enters into a non-exchange-traded forward-based <a href=\"/glossary/w/#weather-derivative\" class=\"term\" title=\"A forward-based or option-based contract for which settlement is based on a climatic or geological variable. One example of such a variable is the occurrence or nonoccurrence of a specified amount of snow at a specified location within a specified period of time.\"><span>weather derivative</span></a> in connection with nontrading activities shall account for the contract by applying an intrinsic value method (as discussed in Section <a altsource=\"GUID-3FDD0B07-237B-4959-816B-2DC9096F2DF8.ditamap\" class=\"ditamap\">815-45-30</a>). </span></span> <span class=\"sfragment\" id=\"sfr_C2FA94C2-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">See Example 1 (paragraph <a href=\"/asc/815/45/#815-45-55-7\" class=\"xref\">815-45-55-7</a>) for an illustration of the accounting for an example degree-day forward contract. </span></span> </div> </div>","snippet":"An entity that enters into a non-exchange-traded forward-based weather derivative in connection with nontrading activities shall account for the contract by applying an intrinsic value method (as discussed in Section 815…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b261a1b18e990d95609efbfacb8f5b5c198bb7f32f41a2d59774eaebe09e9930","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}},{"citation":"815-45-25-2","para":"25-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_C2FA9616-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An entity that purchases a non-exchange-traded option-based weather derivative in connection with nontrading activities shall </span></span>recognize an asset.</div> </div>","snippet":"An entity that purchases a non-exchange-traded option-based weather derivative in connection with nontrading activities shall recognize an asset.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1e9b50d18f2abf4eeb21554912be479ba2ae3d8e0d4bfa698e6dd025e293fd25","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}},{"citation":"815-45-25-3","para":"25-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_C2FA9759-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An entity that sells or writes a non-exchange-traded option-based weather derivative shall </span></span> <span class=\"sfragment\" id=\"sfr_C2FA988F-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">recognize a liability. </span></span> </div> </div>","snippet":"An entity that sells or writes a non-exchange-traded option-based weather derivative shall recognize a liability.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:60d3a402a45f5d58cdf48d4c7c708b938e7b90e3cdc63fa701294b86df75e792","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}},{"citation":"815-45-25-4","para":"25-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <a href=\"/updates/page-1833002/\" class=\"xref\">Paragraph not used</a>.</div> </div>","snippet":"Paragraph not used.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d48a58aeaef0a0414d1d5d47611ff278d2ab919e20e05697d90023ab28ccaf8a","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:45f72a3721b618fb83a8f768daff962e406b6d28c3dd2916dd3f1c838df2d0d9","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}},{"block":null,"heading":"Trading Activities","paragraphs":[{"citation":"815-45-25-5","para":"25-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_C2FA99CD-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">All weather derivative contracts entered into under <a href=\"/glossary/t/#trading\" class=\"term\" title=\"An activity involving securities sold in the near term and held for only a short period of time. The term trading contemplates a holding period generally measured in hours and days rather than months or years. See paragraph 948-310-40-1 for clarification of the term trading for a mortgage banking entity.\"><span>trading</span></a> or speculative activities shall be accounted for as assets or liabilities. </span></span> </div> </div>","snippet":"All weather derivative contracts entered into under trading or speculative activities shall be accounted for as assets or liabilities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4b228ce4cb4b1df840776b9cfc4e0d73a3fd124c6384101d7338a846c78add7a","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}},{"citation":"815-45-25-6","para":"25-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_C2FA9B02-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For purposes of this Subtopic, an entity shall be considered to be involved in trading or speculative activities if it enters into weather derivative contracts with the objective of generating profits on or from exposures to shifts or changes in climatic or geological conditions. </span></span>See paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/815/45/#815-45-55-1\" class=\"xref\">815-45-55-1 through 55-6</a></div> for specific guidance.</div> </div>","snippet":"For purposes of this Subtopic, an entity shall be considered to be involved in trading or speculative activities if it enters into weather derivative contracts with the objective of generating profits on or from exposure…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3835aff2527e43cb7b3d6b5a502151454dea54ad50f2ef8cdc97eab705b3aec7","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d789dd0a9697db9a8fc00e3ff18d45291d8e2722366fa6e5d4a58496dfebadbc","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23c985f577e457beb9941dd3909a20addad69c8ab7b4fbff098d67a605d2588b","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23c985f577e457beb9941dd3909a20addad69c8ab7b4fbff098d67a605d2588b","downloaded_from":"2026-09-10T01:39:38.579Z","last_downloaded_at":"2026-09-10T01:39:38.579Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480966","source_sha256":"83f5d2a2a964b5968af5b8a601dc5d1a9c14dcb889ece70e97df9dce14c47359"}}