FAS 133 prescribes whether or not the obligations of each party to an FX forward are to be recorded in the general ledger at the inception of the contract.

Question

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FAS 133 (now codified as ASC 815) requires that derivative instruments, including FX forwards, be recognized on the balance sheet at fair value, but it does not prescribe the recording of the obligations of each party in the general ledger at the inception of the contract. The focus is on recognizing the derivative's fair value changes over time.

FAS 133 Prescribes Whether or Not the Obligations of Each