The Financial Accountant Standards Board issued a final standard aimed at improving the financial reporting of certain hybrid financial instruments by requiring more consistent accounting and eliminating exemptions.

The new standard, "Statement of Financial Accounting Standard No. 155: Accounting for Certain Hybrid Instruments," is an amendment of FASB Statements Nos. 133 and 140.

Specifically, the new standard allows financial instruments that have embedded derivatives to be accounted for as a whole if the holder elects to account for the whole instrument on a fair value basis.

"Today's statement reflects our commitment to improve financial reporting by reducing complexity through the elimination of unnecessary exemptions and by providing ways to make the overall accounting simpler," said board member Edward Trott, in a statement.This statement is effective for all financial instruments acquired or issued after the beginning of a business's first fiscal year starting after Sept. 15, 2006. Complete changes are available at

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