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 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 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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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 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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March 05, 2020

Best Practices for FX Hedge Performance Reporting

Posted by Lorraine Popylisen
You’ve spent hours and hours developing a hedging strategy, identifying exposures, forecasting, and verifying hedge accounting, but your efforts shouldn’t stop there. To inform management the job is done, and done well, you need to go to the next...
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February 28, 2020

Constant Currency Reporting: Year-Over-Year Challenges

Posted by Helen Kane
Many public corporations report earnings, revenues and expenses on a “constant currency” basis. The objective is to present financials year-over-year (YoY) for comparative purposes without the effects of currency movements. To quote a few public...
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