The current U.S. Dollar strength surprised many, given the recent loose monetary policy of the “QE Era” Fed. Hedgers, however, know that the expected change is rarely the same as actual change in currency markets today. At last look, the Yen was trading at 117, the Euro 1.18 and the Canadian Dollar at 1.20. How […]
As many of you prepare for year-end audits, we would like to share our expectations on where auditors will focus, and highlight key controls in a derivative environment. To uncover audit direction and focus, we looked to the 2014 PCAOB findings (available here) related to their reviews of 2013 audits performed by the Big 4.
When establishing a new cash flow hedge relationship, it is critical to determine the proper hedge period. There is, however, no single, hard and fast answer to this question; the appropriate hedge period can vary, based on four key variables. Foremost among these is the predictability of the anticipated hedged item. Foreign salaries (and other […]
When implementing a cash flow hedge program, a major consideration is whether or not to include time value components (premiums for options, forward points for forwards, etc.) within hedge relationships. Doing so is elective from an accounting perspective; however, there are real-world circumstances and consequences to consider when making the decision. There is a common […]
From risk management to FX best practices, this month’s 2014 AFP Annual Conference in Washington, D.C., addressed many of the hottest topics in the world of treasury and finance. Featuring more than a dozen speakers (including former Federal Reserve chairman Ben Bernanke, New York Times columnist Thomas L. Friedman and former FBI director Robert Mueller), […]
Over the last decade and a half, improving Treasury and Accounting technology has allowed corporations to streamline operations, eliminate redundant work and markedly improve controls. This post will examine two key areas in which Treasury is benefiting from technological advances that were essentially unheard of as late as 2000: hedge accounting and derivative lifecycle management. […]