{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/815/45/","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.","number":"815-45","topic":"815","title":"Weather Derivatives","area":"Broad Transactions","paragraphs":35,"summary":"ASC 815-45 governs the accounting for weather derivatives that are not exchange-traded (exchange-traded weather derivatives fall under ASC 815-10), and excludes insurance contracts that pay only upon an insurable event causing a liability or adverse change in value of a specific asset or liability. If entered into for nontrading purposes, forward-based weather derivatives are accounted for under the intrinsic value method, purchased options are recorded as a premium asset amortized to expense plus intrinsic value measurement, and written options are recorded as a premium liability remeasured to fair value through earnings. All weather derivatives entered into for trading or speculative activities are recognized as assets or liabilities at fair value with subsequent changes in fair value in earnings.","concepts":["weather derivative","intrinsic value method","cumulative strike allocation","heating degree day","trading or speculative activities","option premium amortization","non-exchange-traded contract","embedded premium or discount"],"categories":["Derivatives and hedging","Subsequent measurement","Initial measurement","Fair value"],"level":"advanced","topic_title":"Derivatives and Hedging","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"815-45-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
815-45-55-6AmendedAccounting Standards Update No. 2012-0410/01/2012
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This Subtopic addresses the financial accounting and reporting for weather derivatives within its scope.
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The guidance in this Subtopic applies to all entities.
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Except as noted in this paragraph, the guidance in this Subtopic applies to all weather derivatives that are not exchange-traded (and, therefore, not subject to the requirements of Subtopic 815-10). The guidance in this Subtopic does not apply to contracts written by insurance entities that entitle the holder to be compensated only if, as a result of an insurable event, the holder incurs a liability or there is an adverse change in the value of a specific asset or liability for which the holder is at risk.
","snippet":"Except as noted in this paragraph, the guidance in this Subtopic applies to all weather derivatives that are not exchange-traded (and, therefore, not subject to the requirements of Subtopic 815-10). The guidance in this …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d6a2d972272a8939f28d65f473e41b1997062d182f2b653cd31c8d102c7bb550","downloaded_from":"2026-09-10T01:39:32.624Z","last_downloaded_at":"2026-09-10T01:39:32.624Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481025","source_sha256":"8fc76f3c6b20e42e8ce55364475444a1a9e10b50b12d9d8ed382a3990d86c75a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:21d88b1cabc0e2e63b37c7fcd4764381a8ba8694d27d1d5fcfa19cd73f277129","downloaded_from":"2026-09-10T01:39:32.624Z","last_downloaded_at":"2026-09-10T01:39:32.624Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481025","source_sha256":"8fc76f3c6b20e42e8ce55364475444a1a9e10b50b12d9d8ed382a3990d86c75a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9a5758e811a56f2710fd483e06f1f38349a1bb069b6194c2767164afc5de2831","downloaded_from":"2026-09-10T01:39:32.624Z","last_downloaded_at":"2026-09-10T01:39:32.624Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481025","source_sha256":"8fc76f3c6b20e42e8ce55364475444a1a9e10b50b12d9d8ed382a3990d86c75a"}},{"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":"
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 815-45-30). See Example 1 (paragraph 815-45-55-7) for an illustration of the accounting for an example degree-day forward contract.
","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":"
An entity that purchases a non-exchange-traded option-based weather derivative in connection with nontrading activities shall recognize an asset.
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An entity that sells or writes a non-exchange-traded option-based weather derivative shall recognize a liability.
","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":"
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All weather derivative contracts entered into under trading or speculative activities shall be accounted for as assets or liabilities.
","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":"
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. See paragraphs
815-45-55-1 through 55-6
for specific guidance.
","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"}},{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":"Nontrading Activities","paragraphs":[{"citation":"815-45-30-1","para":"30-1","html":"
A purchased non-exchange-traded option-based weather derivative recognized as an asset under paragraph 815-45-25-2 shall be measured initially at the amount of the premium paid.
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A sold or written non-exchange-traded option-based weather derivative recognized as a liability under paragraph 815-45-25-3 shall be measured initially at the amount of the premium received.
","snippet":"A sold or written non-exchange-traded option-based weather derivative recognized as a liability under paragraph 815-45-25-3 shall be measured initially at the amount of the premium received.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:27ae3bd2a01cf9fb35bd334d1ce83a50760e041ba69a5fcec75d144c1c969f55","downloaded_from":"2026-09-10T01:39:41.115Z","last_downloaded_at":"2026-09-10T01:39:41.115Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480935","source_sha256":"dc24dd7306ac4caad16f9bc19a5338664eb96884f079099cf72d07ae98eeae61"}},{"citation":"815-45-30-3","para":"30-3","html":"
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) for an illustration of the accounting for example contracts.
","snippet":"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 o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9f95d3740ba404f61ee02aa3ea20a3594414f986d67a3409a9c0dc4e3ab71cca","downloaded_from":"2026-09-10T01:39:41.115Z","last_downloaded_at":"2026-09-10T01:39:41.115Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480935","source_sha256":"dc24dd7306ac4caad16f9bc19a5338664eb96884f079099cf72d07ae98eeae61"}},{"citation":"815-45-30-3A","para":"30-3A","html":"
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.
","snippet":"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 contra…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4ab8b24ca43dee6a97ea00b83b9bf992dfe73daae751843887d33c344eee5369","downloaded_from":"2026-09-10T01:39:41.115Z","last_downloaded_at":"2026-09-10T01:39:41.115Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480935","source_sha256":"dc24dd7306ac4caad16f9bc19a5338664eb96884f079099cf72d07ae98eeae61"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:30b6109c156f8b3d4b11700d67d43c0d74f5ab56be209d083141e9ecf90c6609","downloaded_from":"2026-09-10T01:39:41.115Z","last_downloaded_at":"2026-09-10T01:39:41.115Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480935","source_sha256":"dc24dd7306ac4caad16f9bc19a5338664eb96884f079099cf72d07ae98eeae61"}},{"block":null,"heading":"Trading Activities","paragraphs":[{"citation":"815-45-30-4","para":"30-4","html":"
All weather derivative contracts entered into under trading or speculative activities shall be measured initially at their fair value.
","snippet":"All weather derivative contracts entered into under trading or speculative activities shall be measured initially at their fair value.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:313f7e12748c67d6ec154cc8dfadf9530c3a7ddacc979c8d9d851611571c386d","downloaded_from":"2026-09-10T01:39:41.115Z","last_downloaded_at":"2026-09-10T01:39:41.115Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480935","source_sha256":"dc24dd7306ac4caad16f9bc19a5338664eb96884f079099cf72d07ae98eeae61"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7e0389db35d472e41d80a73d89074ff64a3ba625e506558f0f20b30ac86b6305","downloaded_from":"2026-09-10T01:39:41.115Z","last_downloaded_at":"2026-09-10T01:39:41.115Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480935","source_sha256":"dc24dd7306ac4caad16f9bc19a5338664eb96884f079099cf72d07ae98eeae61"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1db2d5a21603cd9c3d7eea0acc2a4b3e28d27a69f724b639837b02157883109e","downloaded_from":"2026-09-10T01:39:41.115Z","last_downloaded_at":"2026-09-10T01:39:41.115Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480935","source_sha256":"dc24dd7306ac4caad16f9bc19a5338664eb96884f079099cf72d07ae98eeae61"}},{"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":"
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.
","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":"
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). 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. The initial allocation of the cumulative strike amount shall not be adjusted over the term of the contract to reflect actual results.
","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":"
See Example 1 (paragraph 815-45-55-7) for an illustration of the accounting for an example degree-day forward contract.
","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":"
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 in paragraph 815-45-35-2 to measure the contract at each interim balance sheet date. The premium asset shall be amortized in a rational and systematic manner.
","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":"
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.
","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":"
See Example 1 (paragraph 815-45-55-7) for an illustration of the accounting for an example degree-day option contract.
","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":"
All subsequent changes in fair value of weather derivative contracts entered into under trading or speculative activities shall be reported currently in earnings.
","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"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"815-45-50-1","para":"50-1","html":"
Weather derivative contracts within the scope of this Subtopic are financial instruments and, therefore, entities that enter into such contracts shall follow the disclosure requirements under Subtopic 825-10.
","snippet":"Weather derivative contracts within the scope of this Subtopic are financial instruments and, therefore, entities that enter into such contracts shall follow the disclosure requirements under Subtopic 825-10.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26716e9345d067f5185a761189e04d9229de304487fe91e72454b7e2072dcd81","downloaded_from":"2026-09-10T01:39:45.884Z","last_downloaded_at":"2026-09-10T01:39:45.884Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480865","source_sha256":"a5a3983f13b9442c7e6112523c0f11aac03fd5e32fe5210af5d97e6500f8d124"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52c9d1dcca9054fb755e06458f7124f8aa612ebd6aa6a6616e0be6e6c80dceaa","downloaded_from":"2026-09-10T01:39:45.884Z","last_downloaded_at":"2026-09-10T01:39:45.884Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480865","source_sha256":"a5a3983f13b9442c7e6112523c0f11aac03fd5e32fe5210af5d97e6500f8d124"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:09eee49a336463caacb696d24a71d9d2ffe3950b8f1d6f8f5754c754ae5091ff","downloaded_from":"2026-09-10T01:39:45.884Z","last_downloaded_at":"2026-09-10T01:39:45.884Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480865","source_sha256":"a5a3983f13b9442c7e6112523c0f11aac03fd5e32fe5210af5d97e6500f8d124"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"815-45-55-1","para":"55-1","html":"
Determining whether or when an entity is involved in trading or speculative activities involving weather derivative contracts is a matter of judgment that depends on the relevant facts and circumstances. The framework in which such facts and circumstances are assessed shall be based on an evaluation of the various activities of an entity rather than solely on the terms of the contracts. Inherent in that framework is an evaluation of the entity's intent for entering into a weather derivative contract.
","snippet":"Determining whether or when an entity is involved in trading or speculative activities involving weather derivative contracts is a matter of judgment that depends on the relevant facts and circumstances. The framework in…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3a397d1e61e4b7b8a194144cde8926a772cc3699284190588dc8631537af351e","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-2","para":"55-2","html":"
It is easier to evaluate the trading activities of an entity if such activities are segregated either organizationally or by legal entity. If an entity conducts both trading activities and nontrading activities and those activities are not segregated either organizationally or by legal entity, it is essential that the entity analyze contracts at inception according to the factors in paragraphs
815-45-55-5 through 55-6
and identify those contracts as either trading or nontrading. However, if an operation's trading activities are not segregated in either of those ways and an evaluation of the indicators identified in paragraphs
815-45-55-4 through 55-6
would conclude that a portion of the operation's activities are trading, then only that portion of the operation's activities that is considered trading shall be accounted for at fair value.
","snippet":"It is easier to evaluate the trading activities of an entity if such activities are segregated either organizationally or by legal entity. If an entity conducts both trading activities and nontrading activities and those…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f94aa34b979012970f38aabb96c680267137bd8017762508e683c4eb196d0ed9","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-3","para":"55-3","html":"
As used in this Subtopic, operation refers to any identifiable activity of an entity (for example, a subsidiary, a division, or a unit) that enters into the types of weather derivative contracts that are within the scope of this Subtopic.
","snippet":"As used in this Subtopic, operation refers to any identifiable activity of an entity (for example, a subsidiary, a division, or a unit) that enters into the types of weather derivative contracts that are within the scope…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23bfed428991b54bfb407d30f09b52d16c33b25f2fd52ab6f257a3103930f903","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-4","para":"55-4","html":"
For purposes of identifying trading activities, the following groups of indicators shall be considered for each identifiable operation (activity) of an entity that enters into weather derivative contracts that are within the scope of this Subtopic. Category A lists the fundamental indicators to be considered for purposes of determining whether the operation of an entity that enters into weather derivative contracts is involved in trading activities. Accordingly, the presence of indicators from Category A may be a strong indication that the operation's activities are trading. The presence of indicators from only Category B may indicate that such activities are trading. The absence of any or all of the indicators in either category, by itself, shall not preclude the operation's activities from being considered trading. Nevertheless, all available evidence shall be considered to determine whether, based on the weight of that evidence, an operation is involved in trading activities.
","snippet":"For purposes of identifying trading activities, the following groups of indicators shall be considered for each identifiable operation (activity) of an entity that enters into weather derivative contracts that are within…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0ae4a52913cdcd11bd3fa3ed387cfc1292d65c6fc4cbeec69e1f1530b2fea5ad","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-5","para":"55-5","html":"
All of the following are fundamental indicators in Category A:
  1. a
    The operation's primary business is not inherently exposed to the specific weather-related risk stated as a variable (for example, temperature, wind velocity, and humidity) in the weather derivative contracts it holds.
  2. b
    The volume of weather derivative contracts exceeds a reasonable or supportable level of weather-related risk inherent in the operation's primary business.
  3. c
    The change in value of the weather derivative contract (for example, based on a temperature variable) is expected to move in a direction that does not mitigate or offset the risk of the underlying exposure (for example, fuel consumption).
  4. d
    The operation develops and uses its own proprietary models to price the weather derivative contracts it offers or trades.
","snippet":"All of the following are fundamental indicators in Category A:\n(a) The operation's primary business is not inherently exposed to the specific weather-related risk stated as a variable (for example, temperature, wind velo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4c662013210fbf1efba689a08c95fb180ed222414dd9de0ce09b0b4bc5483a63","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-6","para":"55-6","html":"
All of the following are secondary indicators (management and controls) in Category B:
  1. a
    Compensation and/or performance measures are tied to the short-term results generated from weather derivative contracts (that is, the operation is measured based on trading profits or changes in the fair values of its positions as opposed to profitable management of income-producing assets).
  2. b
    The operation communicates internally in terms of trading strategy (that is, management reports identify contractual positions, fair values, risk exposure, and so forth).
  3. c
    The word trading is in the name of the operation for internal or external purposes.
  4. d
    Employees of the operation are referred to as traders or have prior experience in derivative trading or risk-management activities.
  5. e
    Assessment of net market positions of the operation is done on a regular basis.
  6. f
    Infrastructure of the operation is similar to that of a trading operation of a bank or investment bank—front office, middle office, and back office (that is, there is a segregation of back-office processing and front-office trading functions).
  7. g
    An infrastructure exists that enables the operation to capture price and other risks on a real-time basis.
  8. h
    The activities are managed on a portfolio or book basis.
","snippet":"All of the following are secondary indicators (management and controls) in Category B:\n(a) Compensation and/or performance measures are tied to the short-term results generated from weather derivative contracts (that is,…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8e6fd0a4780c6d483d333b08a5dd433c55e3e074af9607ae31add3fc65a2d1d4","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1de74dd385d809c438acd7d4c610fd4d57f67e7a61affd8dcefe4c36c38d12d8","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"815-45-55-7","para":"55-7","html":"
The following Cases illustrate two types of degree-day contracts:
  1. a
    A degree-day swap (Case A)
  2. b
    A degree-day option (Case B).
","snippet":"The following Cases illustrate two types of degree-day contracts:\n(a) A degree-day swap (Case A)\n(b) A degree-day option (Case B).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c581deab527db4ae13674400749fb9454e9413b0c3cb5eac90f9c88d4648e4b9","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-8","para":"55-8","html":"
Cases A and B share all of the following assumptions:
  1. a
    Entity A is a construction materials entity that has its sales decrease during cold winters or a chemical manufacturer that has its natural gas consumption costs increase during cold winters. Entity B is a natural gas distribution entity that experiences lower revenues during warm winters.
  2. b
    Neither Entity A nor Entity B is a dealer in weather derivatives (that is, the operations of both entities that entered into this contract are nontrading).
  3. c
    At inception of each contract, the reporting entity constructs the allocation (as presented in the table in paragraph 815-45-55-11) of the strike level of heating degree days across the contract period based on historical heating degree day averages (the weather-related index) for the respective months. That allocation is not part of the contract terms. (Heating degree days is the winter measure of average daily temperature below 65 degrees Fahrenheit.)
  4. d
    Actual heating degree days (as presented in the table in paragraph 815-45-55-11) reflect the measure of actual average daily temperatures below 65 degrees Fahrenheit based on weather service readings. If the average of the daily high and the daily low temperatures is 34 degrees Fahrenheit, then there are 31 heating degree days for that day. To determine the number of heating degree days for a period, add heating degree days for each day of the period.
","snippet":"Cases A and B share all of the following assumptions:\n(a) Entity A is a construction materials entity that has its sales decrease during cold winters or a chemical manufacturer that has its natural gas consumption costs …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f798f85a517507035bb8c729d46a4eeae11916a98eca1e9c2caf753be04e4799","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-9","para":"55-9","html":"
Entity A and Entity B enter into a degree-day swap (that is, a contract with two-directional risk).The contract requires no initial net investment and requires a payment by Entity A to Entity B if cumulative heating degree days are less than 4,500 heating degree days during the period from November 1, 1999, to March 31, 2000. If cumulative heating degree days exceed 4,500 heating degree days during that same period, Entity B will make a payment to Entity A. The contract has a floor of 2,500 heating degree days and a cap of 6,500 heating degree days. The payment under the contract is equal to $10,000 multiplied by the cumulative number of heating degree days above or below 4,500 heating degree days and is made on April 5, 2000. Based on the foregoing terms, this contract carries a maximum payout limitation of $20 million by Entity A and $20 million by Entity B regardless of actual temperature levels experienced. The accounting for the degree-day swap by both parties is presented in the table in paragraph 815-45-55-11.
","snippet":"Entity A and Entity B enter into a degree-day swap (that is, a contract with two-directional risk).The contract requires no initial net investment and requires a payment by Entity A to Entity B if cumulative heating degr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a87a7924080e900284bf480f2d13cd3a87561dbae442a4f40d5e213fc2d528b7","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-10","para":"55-10","html":"
Entity A purchases on November 1, 1999, a degree-day option from Entity B for a premium payment of $5.85 million. The option requires that Entity B pay Entity A $10,000 for each heating degree day in excess of 4,500 heating degree days (the strike level) cumulative during the period from November 1, 1999, to March 31, 2000. This contract specifies a maximum payout limitation of $20 million regardless of actual temperature levels experienced, thereby effectively stipulating a cap based on 6,500 heating degree days. The contract is settled on April 5, 2000. The accounting for the purchased degree-day option by both parties is presented in the table in the following paragraph. The accounting does not include amounts related to the option premium of $5.85 million.
","snippet":"Entity A purchases on November 1, 1999, a degree-day option from Entity B for a premium payment of $5.85 million. The option requires that Entity B pay Entity A $10,000 for each heating degree day in excess of 4,500 heat…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fe2c1aa6bdbc10510118cf2ed77f8f849ea204692125ccf72b4237e7139527e1","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"citation":"815-45-55-11","para":"55-11","html":"
The following table presents the accounting by both parties for the weather derivatives in Cases A and B.
","snippet":"The following table presents the accounting by both parties for the weather derivatives in Cases A and B.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e893d1c93a9e8cef44c98f574eca71ddd39f827ab7024d9a4b38ed112680c0b7","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b458c8f8fff68a78db2bff6a5b8bc89e628d415513ac28fd7e7ac8f75b09a6c3","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0c5d44f23715635f54bbc5f39523cdb4d20544d627cc2ffa07d7fd4e272f2ab","downloaded_from":"2026-09-10T01:39:50.034Z","last_downloaded_at":"2026-09-10T01:39:50.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480836","source_sha256":"0eaa1e91fbf31d924946ff8b2dd55008125f4b64b2d61944908e5df5e6c6f376"}},{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":null,"heading":"Fair Value Measurements and Disclosures","paragraphs":[{"citation":"815-45-60-1","para":"60-1","html":"
For a discussion of fair value measurements and related disclosure requirements, see Topic 820.
","snippet":"For a discussion of fair value measurements and related disclosure requirements, see Topic 820.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c449031b8ab8ee87014faa383a820e13b35fe296f6aa2ccfcba4844a43fe279c","downloaded_from":"2026-09-10T01:39:52.581Z","last_downloaded_at":"2026-09-10T01:39:52.581Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480805","source_sha256":"7a666bccbbd1d21f751ecaec8cb087fa681cb9673a2aedf3c1b64457f766b3d8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:727f50ab36d0f8dcba765060f8d9fa7f4dbfd5cf44b4173b372b504bac4e2bad","downloaded_from":"2026-09-10T01:39:52.581Z","last_downloaded_at":"2026-09-10T01:39:52.581Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480805","source_sha256":"7a666bccbbd1d21f751ecaec8cb087fa681cb9673a2aedf3c1b64457f766b3d8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6b891120f050d64db7ec126be94dd19f21ed6b9c894c6f5d53e55120a4258394","downloaded_from":"2026-09-10T01:39:52.581Z","last_downloaded_at":"2026-09-10T01:39:52.581Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480805","source_sha256":"7a666bccbbd1d21f751ecaec8cb087fa681cb9673a2aedf3c1b64457f766b3d8"}}],"enrichment":{"summary":"ASC 815-45 governs the accounting for weather derivatives that are not exchange-traded (exchange-traded weather derivatives fall under ASC 815-10), and excludes insurance contracts that pay only upon an insurable event causing a liability or adverse change in value of a specific asset or liability. If entered into for nontrading purposes, forward-based weather derivatives are accounted for under the intrinsic value method, purchased options are recorded as a premium asset amortized to expense plus intrinsic value measurement, and written options are recorded as a premium liability remeasured to fair value through earnings. All weather derivatives entered into for trading or speculative activities are recognized as assets or liabilities at fair value with subsequent changes in fair value in earnings.","key_points":["Scope: applies to all entities and all non-exchange-traded weather derivatives, but not to insurance contracts that compensate the holder only upon an insurable event causing a liability or adverse change in the value of a specific asset or liability at risk (815-45-15-1 through 15-2).","Nontrading forward-based (e.g., degree-day swap) weather derivatives are accounted for under the intrinsic value method (815-45-25-1; 815-45-35-1).","The intrinsic value method allocates the cumulative strike amount to individual periods at inception using external statistical data (e.g., National Weather Service), and that initial allocation is never adjusted for actual results; interim intrinsic value equals cumulative actual-versus-allocated differences times the contract price (815-45-30-3; 815-45-35-2).","A purchased non-exchange-traded option-based weather derivative is recognized as an asset measured initially at the premium paid, then amortized to expense in a rational and systematic manner while the intrinsic value method is applied at each interim balance sheet date (815-45-25-2; 815-45-30-1; 815-45-35-4).","A written non-exchange-traded option-based weather derivative is recognized as a liability initially measured at the premium received; the premium is not amortized and all subsequent fair value changes go to earnings (815-45-25-3; 815-45-30-2; 815-45-35-5).","Off-market contracts may contain an embedded premium or discount (e.g., a cumulative strike inconsistent with historical weather data); it must be quantified, removed from the benchmark strike, and accounted for separately (815-45-30-3A).","Trading/speculative classification turns on the entity's intent and an evaluation of its activities, assessed via Category A fundamental indicators (815-45-55-5) and Category B management-and-control indicators (815-45-55-6); such contracts are measured initially and subsequently at fair value with changes in earnings (815-45-25-5 through 25-6; 815-45-30-4; 815-45-35-7)."],"categories":["Derivatives and hedging","Subsequent measurement","Initial measurement","Fair value"],"audience_level":"advanced","student_note":"This is the rare corner of ASC 815 where a derivative is NOT measured at fair value: nontrading, non-exchange-traded weather derivatives use the intrinsic value method instead. The common mistake is assuming all derivatives get fair value treatment, or forgetting the asymmetry—purchased option premiums are amortized while written option premiums are not and are simply remeasured to fair value through earnings.","related_topics":["815-10","820","825-10","944"],"key_concepts":["weather derivative","intrinsic value method","cumulative strike allocation","heating degree day","trading or speculative activities","option premium amortization","non-exchange-traded contract","embedded premium or discount"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:388df5ed0ebf46d639c3d3366107f0d74fb0f600dc567d05d15404c86875ec97","downloaded_from":"2026-09-10T01:39:26.652Z","last_downloaded_at":"2026-09-10T01:39:52.581Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"815-25","title":"Fair Value Hedges","topic_title":"Derivatives and Hedging","score":0.7254,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9158f6b52355474e01e28969ade4bf292d8db02101a96c3c9a009a333a9c566f","downloaded_from":"2026-09-10T01:37:04.984Z","last_downloaded_at":"2026-09-10T01:37:31.976Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"815-10","title":"Overall","topic_title":"Derivatives and Hedging","score":0.6803,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4220a6deb8d90c954d8e8e986a3f69043011762ce167ca5dc569817e39218bc2","downloaded_from":"2026-09-10T01:34:51.547Z","last_downloaded_at":"2026-09-10T01:35:54.090Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"815-944","title":"Financial Services—Insurance","topic_title":"Derivatives and Hedging","score":0.6718,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:71737bac67888d4eb16d3fbd7c53a347f9b316d56aac5acf89b2775035d0859c","downloaded_from":"2026-09-10T01:40:24.221Z","last_downloaded_at":"2026-09-10T01:40:44.205Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"815-932","title":"Extractive Activities—Oil and Gas","topic_title":"Derivatives and Hedging","score":0.6437,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:93e2a1c6926468be959e50e9c2989f588c7dc3555427738eb6d246451589e413","downloaded_from":"2026-09-10T01:40:07.746Z","last_downloaded_at":"2026-09-10T01:40:20.826Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"815-980","title":"Regulated Operations","topic_title":"Derivatives and Hedging","score":0.6373,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7888e12b5410def15e829463f6fb6b0baafa83bedb51725e3843c3296a0ff773","downloaded_from":"2026-09-10T01:41:23.271Z","last_downloaded_at":"2026-09-10T01:41:34.252Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"815-30","title":"Cash Flow Hedges","topic_title":"Derivatives and Hedging","score":0.6237,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e8bb338780fcab6c20b934e6b5f670f8d011497cac71dbba6590cde584fca4b2","downloaded_from":"2026-09-10T01:37:35.233Z","last_downloaded_at":"2026-09-10T01:38:16.160Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"815-40","title":"Contracts in Entity's Own Equity","topic_title":"Derivatives and 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