To implement a successful hedge program, it’s important that all parties involved know exactly what the hedge program will provide. This prevents disappointment and level sets expectations with management. Here are some common benefits FX hedge...
June
30,
2020
Posted by
Ruth Hardie
Lenders such as banks, mortgage lenders, and credit unions manage large portfolios of fixed-rate loans. Typically, these assets are funded with floating-rate liabilities. This mismatch between fixed-rate assets and floating-rate liabilities can...
June
25,
2020
Posted by
Jeff Goggins
The translation process converts local currency financial statements of subsidiaries into USD based financials for consolidation and reporting purposes. This is a relatively simple accounting process that’s typically performed by software in...
June
23,
2020
Posted by
Glenn Suarez
Using a Net Investment hedge strategy to boost income has been around for decades, but the ultra-low interest rate environment in Europe combined with the new rules under ASU 2017-12 has renewed curiosity in this approach. By utilizing a...
June
18,
2020
Posted by
Lorraine Popylisen
Do you need to implement a cash flow hedge program quickly — either due to urgent management directives, Board member mandates, or competitive pressures? It happens all the time, leaving treasurers and decision-makers to scramble to come up with...
June
17,
2020
Posted by
Lorraine Popylisen
A common misconception is that if you have a foreign currency transaction, you can simply hedge it and apply special hedge accounting. However, the fact is that sometimes an exposure can be hedged, but it will not qualify for special hedge...
June
10,
2020
Posted by
Ruth Hardie
Companies that need to refinance their debt do not have to wait until they refinance to lock in their interest rate on new issuances. Treasury organizations may choose to lock in current interest rate curves for the future refinancing date for a...
May
04,
2020
Posted by
Ruth Hardie
In March, the FASB issued ASU 2020-04 on the “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance provides optional practical expedients and exceptions to GAAP for contracts, hedge relationships and other...
April
10,
2020
Posted by
Glenn Suarez
There has been some confusion around the ASC 815 rules set regarding effectiveness assessments and probability assessments. Both are required under the accounting guidance, but they evaluate the hedge relationship from two different perspectives....