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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April 07, 2020

Quarter-End Interest Rate Update: What You Can Expect with the Current Market [VIDEO]

Posted by Hedge Trackers
In this video, Ruth Hardie, senior director of client services, provides an overview of what you can expect from interest rate swaps given the current large drop in rates.
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April 02, 2020

Zero Percent Floors' Impact on Hedging: Negotiating Debt & Swaps

Posted by Ruth Hardie
With interest rates near all-time lows, many companies are starting to worry about the effectiveness of their current hedges when they aren’t perfectly matched to the underlying debt, while others are looking to lock in the favorable rates by...
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March 20, 2020

Need to Monetize FX Hedges to Boost Cash Flow?

Posted by Helen Kane
Under stable market conditions, most corporate foreign currency hedgers have a “set it and forget it” hedge strategy. Whether it’s cash flow or net investment hedging, once the hedges are in place, the majority of companies hold onto their...
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March 16, 2020

Fed Takes Fed Funds Rate to Zero: How Zero Percent Floors Impact Hedge Programs

Posted by Farah Lotia
On Sunday afternoon, the Federal Open Market Committee (FOMC) reduced its target rate by 100bps to a range of 0-0.25%. Zero percent interest rates are quickly becoming a reality in the United States. In fact, treasury inflation-protected...
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March 12, 2020

Identifying Hedgeable FX Exposures: Accounting & Economic Risks

Posted by Lorraine Popylisen
At Hedge Trackers, we are frequently asked to help identify “hedgeable” cash flow exposures under ASC 815 for our clients. Sometimes, there is an accounting exposure but no economic exposure and vice versa. The best hedges protect both the...
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March 10, 2020

Protecting Margins on Foreign Sales: Dollars vs. Percent

Posted by Glenn Suarez
Many companies protect margins from changes in foreign currency rates by using special Cash Flow hedge accounting strategies. But when subsidiaries transact in foreign currencies, the functional currency of that subsidiary impacts the ability to...
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March 06, 2020

How the Coronavirus Can Impact Your FX Cash Flow Hedge Program

Posted by Karen Gubler
Many companies will be affected by a global pandemic (should it come to fruition)—and a number are already being affected just by the containment efforts. We see three sources that will be affected:
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