Template:M comp disc 2002 ISDA Close-out Amount

See ISDA Comparison for a comparison between the 1992 ISDA and the 2002 ISDA. A Close-out Amount is the replacement/termination value for a single Transaction, or a related group of Transactions that a party calculates when closing out an ISDA, but it is not the final sum due under the ISDA Master Agreement. Each of the determined Close-out Amounts feeds into the Early Termination Amount, which is the total net sum due under the ISDA Master Agreement at the conclusion of the close-out process.

ISDA’s crack drafting squad™ introduced the Close-out Amount into the 2002 ISDA to correct the total trainwreck of a close-out methodology set out in the 1992 ISDA. In the “good old days”, you valued Terminated Transactions were valued according to Market Quotation or Loss and those un-intuitive and — well, flat-out nutso — “First” and “Second” Methods. There is a “Settlement Amount” concept under the 1992 ISDA, but it only really relates to Market Quotation.