14 CFR 61.3 (d)
(d) Flight instructor certificate. (1) A person who holds a flight instructor certificate issued under this part must have that certificate, or other documentation acceptable to the Administrator, in that person's physical possession or readily accessible in the aircraft when exercising the privileges of that flight instructor certificate.
The part in bold is what I don't understand. What exactly defines this? If I'm riding along with a student who is working on Lazy-8's and I'm helping him with that, I'm "exercising the privileges of that flight instructor certificate", correct? Therefore I'd need it with me. What about if the student is about to leave for a solo XC for timebuilding purposes, and I decide to ride along. In that case am I "exercising the privileges of that flight instructor certificate"?
Basically the way I see it, the only privileges the flight instructor certificate gives you is the ability to sign off 8710's and make logbook endorsements. Neither of which occur in an airplane. So why are they making this distinction? On the other hand, 61.3(a) I can understand because
all the privileges associated with a pilot's certificate can only be exercised in an airplane.
By the way, I'm not asking for advice here. I'm aware it's best to just have all the docs with you at all times. I'm just wondering why the FAA decided to use that specific wording, and what they exactly meant by it.