A contract feature inventory is a clause-by-clause record of terms that can change accounting. It begins with the complete executed agreement and all amendments. A trade confirmation or treasury label is supporting evidence, but it cannot replace the contract.
Extract the decision facts
Record the underlying, notional amount or payment provision, settlement method, initial net investment, dates, currencies, counterparties, collateral, options, indexes, contingencies, and embedded terms. Link each fact to a clause. ASC 815-10-15-83 begins the derivative-characteristics guidance, while later paragraphs develop the related tests and exceptions.
For a copper forward, the inventory might identify a copper-price underlying, 100,000 pounds, a fixed contract price, a December settlement date, and cash net settlement. A host debt agreement might add an indexed interest term and a put option. Those features require separate rows even when one accounting conclusion later covers the contract.
Use the inventory as an intake control
Mark each row as supported, missing, or conflicting. Assign unresolved legal terms to counsel and valuation inputs to the valuation owner. The inventory does not decide derivative scope or separation of an embedded feature. It gives the next reviewer a complete, dated fact set on which to make those decisions.
Put the concept to work
Analyze this concept
- Analyze a supplied file for contract feature inventory, show the evidence and mechanics, and identify any conclusion that remains outside the supplied scope.
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