2 Challenges with Hedging Net Income with Proxy Hedges
With foreign functional subsidiaries, hedging net income is difficult to do. But here’s how it can be done with a proxy hedge.
The GTreasury Blog
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How to Record Foreign Currency Transactions (& Identify FX Exposure)
In this blog, we explain three steps (with examples) to properly recording foreign currency transactions under ASC 830.
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4 Foreign Currency Transactions that Could Be Misrepresenting Your Earnings & Hedge Results (& How to Fix Them)
In this blog, we cover 4 difficult and problematic types of transactions that could be misrepresenting your earnings and hedge results – and how to fix them.
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Is Your Foreign Currency Risk Out Of Control? 5 FAQs
When left unaddressed, foreign currency risk can wreak havoc on your bottom line. But it doesn’t have to be this way. To keep foreign currency fluctuations under control and drive predictability in financial statements, many companies turn to FX hedge programs.
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3 Types of Hedging: Which Hedge Strategy is Right for You?
A hedge program is most effective when it aligns with the way your company evaluates financial performance. In this blog, we provide an overview of three different hedge strategy types that companies often turn to.
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Risk Management in Volatile Markets: How to Respond with Hedging
Volatility across currency, interest rate and commodity markets – plus regulatory and accounting standards updates – have market participants wondering what they can do to stabilize their operations. Here’s how to respond with hedging – no matter how the market turns.
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FX Risk Management Policy & Objective Setting
Today, I’m going to be talking about objective setting. And when we’re talking about FX policies, a lot of times – almost universally, I guess – I see the objective in the policies to mitigate FX risk, and it’s not really clear what it is we’re communicating to the board of directors who is […]
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5 Common FX Risk Management Mistakes
As companies implement and run foreign currency (FX) risk management programs, they need to be aware of some common mistakes. Not all treasuries will encounter every mistake, but they are sure to encounter at least one of these—if not now, then in the not-too-distant future.
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Top 5 Balance Sheet Hedges That Create Risky Positions
Once a company establishes a balance sheet program, it likely runs on auto-pilot from then on. Exposures are gathered, forecasted, netted, hedged and adjusted inter-month, and the results of the program are reported — but rarely is there a “review” of the hedge program from top to bottom.
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Top Benefits & Limitations of FX Hedge Programs
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.
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Leveraging Cross Currency Net Investment Hedges to Boost Earnings Through Interest Income
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.
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Special Hedge Accounting: Why Functional Currency Matters
A common misconception is that if you have a foreign currency transaction, you can simply hedge it and apply special hedge accounting.
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Need to Monetize FX Hedges to Boost Cash Flow?
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 derivatives through maturity. It’s an understandable practice as the best hedgers usually deliver currency against their hedges. This preserves the hedge rate in margin and converts cash at the same hedge rate.
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Identifying Hedgeable FX Exposures: Accounting & Economic Risks
At Hedge Trackers, we are frequently asked to help identify “hedgeable” cash flow exposures under ASC 815 for our clients.
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Protecting Margins on Foreign Sales: Dollars vs. Percent
Many companies protect margins from changes in foreign currency rates by using special Cash Flow hedge accounting strategies.