{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/815/45/#35-subsequent-measurement","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":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":"Nontrading Activities","paragraphs":[{"citation":"815-45-35-1","para":"35-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_C30EA3FF-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 the intrinsic value method. </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 the intrinsic value method.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:164b5b985c36f1041df7cae65102e326f85a6631cca127a320b0f6d60b532a42","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}},{"citation":"815-45-35-2","para":"35-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_C30EA566-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The intrinsic value method computes an amount based on the difference between the expected results from an upfront allocation of the cumulative strike and the actual results during a period, multiplied by the contract price (for example, dollars per heating degree day). </span></span><span class=\"sfragment\" id=\"sfr_C30EA69F-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The intrinsic value (or intrinsic value measure) of the contract at interim dates shall be calculated based on cumulative differences between actual experience and the allocation through that date. </span></span><span class=\"sfragment\" id=\"sfr_C30EA7EA-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The initial allocation of the cumulative strike amount shall not be adjusted over the term of the contract to reflect actual results. </span></span></div></div>","snippet":"The intrinsic value method computes an amount based on the difference between the expected results from an upfront allocation of the cumulative strike and the actual results during a period, multiplied by the contract pr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6180e60dc1f9424f93e96c3979aa9be1153a40750c92c05f80b607111d19c7d3","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}},{"citation":"815-45-35-3","para":"35-3","html":"<div class=\"asc-body\"><div class=\"norm-text\">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.</div></div>","snippet":"See Example 1 (paragraph 815-45-55-7) for an illustration of the accounting for an example degree-day forward contract.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbb4f29826512b0c9faef93301fc92b63e98355e233dd54050c6f67445068bdf","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}},{"citation":"815-45-35-4","para":"35-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_C30EA92C-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><span class=\"sfragment\" id=\"sfr_C30EAA63-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">amortize to expense the premium paid (or due) and apply the intrinsic value method described in paragraph <a href=\"/asc/815/45/#815-45-35-2\" class=\"xref\">815-45-35-2</a> to measure the contract at each interim balance sheet date. </span></span><span class=\"sfragment\" id=\"sfr_C30EABD3-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The premium asset shall be amortized in a rational and systematic manner. </span></span></div></div>","snippet":"An entity that purchases a non-exchange-traded option-based weather derivative in connection with nontrading activities shall amortize to expense the premium paid (or due) and apply the intrinsic value method described i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91e3b9af6159d93472b32149ac65a896850ba1e86518c7464f53a7983cabea40","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}},{"citation":"815-45-35-5","para":"35-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_C30EAD10-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">All entities that sell or write a non-exchange-traded option-based weather derivative shall </span></span><span class=\"sfragment\" id=\"sfr_C30EAE2F-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">recognize any subsequent changes in <a href=\"/glossary/f/#fair-value\" class=\"term\" title=\"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.\"><span>fair value</span></a> currently in earnings—the premium shall not be amortized. </span></span></div></div>","snippet":"All entities that sell or write a non-exchange-traded option-based weather derivative shall recognize any subsequent changes in fair value currently in earnings—the premium shall not be amortized.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fb4e538271d40238c420d76fc3d27883eb51b7bd3ecdcf115ddf7ee956746412","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}},{"citation":"815-45-35-6","para":"35-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_C30EAF6E-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 option contract. </span></span></div></div>","snippet":"See Example 1 (paragraph 815-45-55-7) for an illustration of the accounting for an example degree-day option contract.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3ce6ca663d80767b9ce93972a6ae74afd179d42c6b88f0a12af9463214097465","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:510ebd94c422e9ee758cdd7185a5fc2be5f8cbd6aa4c3cb13596e402f961c26d","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}},{"block":null,"heading":"Trading Activities","paragraphs":[{"citation":"815-45-35-7","para":"35-7","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_C30EB0A9-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">All subsequent changes in fair value of 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 </span></span><span class=\"sfragment\" id=\"sfr_C30EB1B6-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">reported currently in earnings. </span></span></div></div>","snippet":"All subsequent changes in fair value of weather derivative contracts entered into under trading or speculative activities shall be reported currently in earnings.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d0bb7937fbcd7f2c97392b1731a1495881156e618f08d7e7a7d20708b24ec0ee","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8f47863d5807d4b83a8ffa3c24d1a2621579cef54897bf9c79b0d5b3af7f8c8f","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:22abb146f3a3b52e570635fcdf05aea0aa79873192a9db93d480591e3f33a052","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:22abb146f3a3b52e570635fcdf05aea0aa79873192a9db93d480591e3f33a052","downloaded_from":"2026-09-10T01:39:43.163Z","last_downloaded_at":"2026-09-10T01:39:43.163Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480899","source_sha256":"f90a68263507d4a8bab425f4a08ccfe6571df0acbeb1b7627b555fb70eac301e"}}