-70-
requirements satisfied the fair value requirements of SFAS No.
107.
As relevant herein, the FASB allowed a variety of
methodologies for estimating fair values, including the use of
midmarket values if any adjustments thereto were likely to be
negligible or not cost effective to estimate reliably. The FASB
recognized in SFAS No. 107 that quoted market prices did not
exist for custom-tailored instruments such as swaps and
recommended that “an estimate of fair value might be based on the
quoted market price of a similar financial instrument, adjusted
as appropriate”. In illustrating an acceptable disclosure under
SFAS No. 107, SFAS No. 107 gives the following description of
swap valuation: “The fair value of interest rate swaps * * * is
the estimated amount that the Bank would receive or pay to
terminate the swap agreements at the reporting date, taking into
account current interest rates and the current creditworthiness
of the swap counterparties.”
c. SFAS No. 119
In October 1994, the FASB issued SFAS No. 119, “Disclosures
about Derivative Financial Instruments and Fair Value of
Financial Instruments”. SFAS No. 119 required footnote
disclosure of the nature, terms, and fair values of financial
derivative instruments. SFAS No. 119 was not effective for any
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