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FASB Statement No. 133

OPTIONS XL EXOTICS XL RISK XL UTILITY XL BONDS XL Consulting Services

"[FASB 133] requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value."
Statement of Financial Accounting Standards No. 133,
Financial Accounting Standards Board (FASB)

Standard 133 of the Financial Accounting Standards Board details the accounting practices required for the reporting of a derivative product on financial statements. Under this Statement, derivatives are recognized as:

A hedge of the exposure in changes of a firm’s asset or liability
A hedge of the exposure to variable cash flows
A hedge of a foreign currency exposure

The statement establishes the practices that are to be used for reporting hedge gains and losses on a fair value basis.

Montgomery Investment Technology, Inc. offers a line of option-pricing models as add-ins for popular spreadsheet and database software packages, including:

Excel Applix Access SQL Server

Windows DLLs and UNIX LIB files are available to software developers for use with:

Visual Basic Visual C++ PowerBuilder Sun Solaris Linux

OPTIONS XL library of functions:

Black-Scholes	Constant Elasticity of Variance (CEV)
Binomial	Jump-Diffusion
Whaley	Gram-Charlier
Flexible Binomial	Broadie-Detemple American

EXOTICS XL library of functions

Asian options	Options with stepped exercise prices
Options with indexed exercise	Barrier (knock-out or knock-in) options
("out-performance") or spread options	Compound options
Lookback options

RISK XL and UTILITY XL andlibrary of functions:

VaR Equities anf Futures	Efficient Frontier
Historical Price Volatility	Advanced analysis of price changes
eGARCH	Foreign exchange functions
Monte Carlo simulation	Forwards and futures contracts

Documentation regarding these models and their application is provided. The consultants at Montgomery Investment Technology, Inc.have the expertise to assist our customers in valuing standard and "alternative" (non-standard) option contracts. Option pricing is complex but we can provide the tools and technical support to simplify the valuation process.

Montgomery Investment Technology, Inc. was founded in 1988 as we developed the first spreadsheet add-in product for valuing options. Our award winning OPTIONS XL Premium Series was used by FASB for option valuation in their June 1993 ISO (FAS 123) exposure draft. FinTools® Software is currently used by many Big Five and middle market accounting firms, compensation consultants and corporations for valuation and reporting purposes.