Split accounting encompasses both (1) the manner of valuing a derivative and (2) the manner of reporting the change in a derivative's carrying value.

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Split accounting involves both valuing a derivative based on its underlying components (such as intrinsic value and time value) and reporting the changes in its value over time in financial statements, often in different financial statement categories depending on the nature of the changes.

Split Accounting Encompasses Both (1) the Manner of Valuing a Derivative