# Derivative, embedded derivative

- Canonical URL: https://www.gerhardmerk.de/derivative-embedded-derivative
- Post ID: 591313
- Modified: 2023-07-25T21:00:11+00:00
- Language: en

## Definition

According to IAS 39.10, a component of a compound (structured) financial instrument, also called a hybrid financial instrument and sometimes just a hybrid, - that also contains a non-derivative host contract (an insurance contract, lease, purchase contract or other financial instrument, such as debt or equity, that is combined with an embedded derivative to create a hybrid security), - with the result that a portion of the hybrid's cash flows is subject to variability similar to that of a stand-alone derivative. - An embedded derivative changes some or all of the cash flows from a contract depending on a specified interest rate, financial instrument price, commodity price, foreign exchange rate, price or rate index, credit rating or other variable. - See derivative, derivatives, classification. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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