Leading view

More qualitative and quantitative information about the risks associated with financial instruments and off- balance-sheet financing arrangements should be disclosed in the notes to the financial statements.

* The majority of users agrees that there is a lack of relevant information in financial statements about the ever-increasing number of new financial instruments and off-balance-sheet arrangements, and that lack of information is an important impediment to their analysis work [p. 1-14, 16]. Some users believe that the current disclosure about some of the risks associated with financial instruments (contained mostly in FASB Statement No. 105) is inadequate and potentially misleading [p. 4, 7-10, 16]

* More qualitative and quantitative information about financial instruments and off-balance-sheet financing arrangements is needed to understand the nature of the various risks undertaken by a company [p. 1, 3-13, 15- 17]. Suggestions of types of information needed include:

* Hedging strategy [p. 2-6, 8-12, 17]

* Sensitivity analysis based on changes in interest and foreign exchange rates [p. 5, 7, 11, 17]

* More breakdown information on the risks related to derivative products (swaps, future contracts, etc.), particularly credit and counterparty risks [p. 6-7, 10-12, 16, 18].

Alternative view

Together with improved disclosures, the development of accounting measurement rules (that is, for purposes of recognition in the body of the financial statements) for financial instruments and off-balance-sheet financing arrangements should be a priority.

* Accounting is not keeping up with all the innovation that is taking place in the area of financial instruments and off-balance-sheet financing [p. 1-2, 5, 11, 15, 17]. Of particular importance is the need to improve hedge accounting [p. 4, 8-12].