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 level: performance reporting.
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.
The thought of applying hedge accounting can be daunting for those unfamiliar with the requirements for qualifying for special hedge accounting treatment under ASC 815. In this post, we will discuss the basic requirements for qualifying and applying special hedge accounting.
It’s mission-critical for companies to protect their margins, revenues, and expenses from unnecessary volatility. A lot of the time, volatility comes from currency changes — or, foreign exchange risk.
Most treasury professionals are comfortable gathering and netting down same currency exposures that go in opposite directions.
Translation and transaction accounting are often confused for one another — but the difference between them is important. How can you tell them apart?