July 02, 2020

Top Benefits & Limitations of FX Hedge Programs

Posted by Glenn Suarez
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...
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June 30, 2020

Last-of-Layer Hedging for Financial Institutions

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...
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June 25, 2020

6 Translation Accounting Nuances You Should Know

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...
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June 23, 2020

Leveraging Cross Currency Net Investment Hedges to Boost Earnings Through Interest Income

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...
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June 18, 2020

For the Urgent Hedger: Cash Flow Hedging Made Easy With Hedge Trackers

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...
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June 17, 2020

Special Hedge Accounting: Why Functional Currency Matters

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...
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June 10, 2020

Interest Rate Risk: Hedging Future Issuance of Fixed Rate Debt

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...
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May 04, 2020

LIBOR Transition: Understanding FASB's Latest Reference Rate Reform Guidance

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...
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April 10, 2020

Hedge Effectiveness & Probability Assessments

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....
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