# ASC 815-45-30: Derivatives and Hedging — Weather Derivatives — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/815/45/#30-initial-measurement) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:39:41.115Z to 2026-09-10T01:39:41.115Z Record version: sha256:1db2d5a21603cd9c3d7eea0acc2a4b3e28d27a69f724b639837b02157883109e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 815-45-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/815/45/#30-initial-measurement) SEC content: no #### Nontrading Activities ##### [815-45-30-1](https://asc.understandingaccounting.org/asc/815/45/#815-45-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:39:41.115Z to 2026-09-10T01:39:41.115Z Record version: sha256:69084d72080d9dcf3c8585f2e5b25e52ff230f989101fbc31e4b901e62f0b877 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A purchased non-exchange-traded option-based [weather derivative](https://asc.understandingaccounting.org/glossary/w/#weather-derivative "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.") recognized as an asset under paragraph [815-45-25-2](https://asc.understandingaccounting.org/asc/815/45/#815-45-25-2) shall be measured initially at the amount of the premium paid. ##### [815-45-30-2](https://asc.understandingaccounting.org/asc/815/45/#815-45-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:39:41.115Z to 2026-09-10T01:39:41.115Z Record version: sha256:27ae3bd2a01cf9fb35bd334d1ce83a50760e041ba69a5fcec75d144c1c969f55 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A sold or written non-exchange-traded option-based weather derivative recognized as a liability under paragraph [815-45-25-3](https://asc.understandingaccounting.org/asc/815/45/#815-45-25-3) shall be measured initially at the amount of the premium received. ##### [815-45-30-3](https://asc.understandingaccounting.org/asc/815/45/#815-45-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:39:41.115Z to 2026-09-10T01:39:41.115Z Record version: sha256:9f95d3740ba404f61ee02aa3ea20a3594414f986d67a3409a9c0dc4e3ab71cca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The intrinsic value method requires that the reporting entity allocate the cumulative strike amount to individual periods within the contract term. That allocation shall reflect reasonable expectations at the beginning of the contract term of normal or expected experience under the contract. That allocation shall be based on data from external statistical sources, such as the National Weather Service. See Example 1 (paragraph [815-45-55-7](https://asc.understandingaccounting.org/asc/815/45/#815-45-55-7)) for an illustration of the accounting for example contracts. ##### [815-45-30-3A](https://asc.understandingaccounting.org/asc/815/45/#815-45-30-3A) Pending content: no Source downloaded (UTC): 2026-09-10T01:39:41.115Z to 2026-09-10T01:39:41.115Z Record version: sha256:4ab8b24ca43dee6a97ea00b83b9bf992dfe73daae751843887d33c344eee5369 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A purchased or written weather derivative may contain an embedded premium or discount if the contract terms are not consistent with current market terms (for example, the cumulative strike amount referenced in the contract is not consistent with historical weather data, adjusted for expected experience). In those circumstances, the premium or discount shall be quantified, removed from the calculated benchmark strike, and accounted for as discussed in the preceding paragraphs. #### Trading Activities ##### [815-45-30-4](https://asc.understandingaccounting.org/asc/815/45/#815-45-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:39:41.115Z to 2026-09-10T01:39:41.115Z Record version: sha256:313f7e12748c67d6ec154cc8dfadf9530c3a7ddacc979c8d9d851611571c386d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All weather derivative contracts entered into under [trading](https://asc.understandingaccounting.org/glossary/t/#trading "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.") or speculative activities shall be measured initially at their [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.").