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  • FASB Changes: How Should Commodity Hedgers Prepare?

    One of the most touted headlines around the recent FASB Exposure Draft dealing with hedge accounting is the fact that commodity hedgers will be allowed to bifurcate risk.

  • Apples and Oranges: the Time Value Component of Options vs. Forwards

    Currency hedgers have the choice of including or excluding time value in effectiveness testing when applying cash flow hedge accounting to derivatives hedging forecasted FX-denominated transactions.

  • Points Well Taken: Revisiting Effectiveness Methods, in the Context of Proposed Hedge Accounting Rules

    The FASB’s proposed changes to its hedge accounting model may provide an impetus for hedgers to reassess their current approaches to effectiveness testing and consider how they might best benefit from the future rules as they are likely to be structured.

  • Commodity Hedgers: What You Need to Know About the New Hedge Accounting Exposure Draft

    Hedge accounting is changing – for the better, no less! There are a few items in FASB’s Sept. 8 Exposure Draft that should be noted, as these will affect all commodity hedgers taking special hedge accounting:

  • IR Hedgers: What You Need to Know About the New Hedge Accounting Exposure Draft

    Hedge accounting is changing – for the better, no less! There are a few items in FASB’s Sept. 8 Exposure Draft that should be noted, as these will affect all interest rate hedgers taking special hedge accounting:

  • FX Hedgers: What You Need to Know About the New Hedge Accounting Exposure Draft

    Hedge accounting is changing – for the better! There are a few items in FASB’s Sept. 8 Exposure Draft that should be noted, as these will affect all foreign currency hedgers taking special hedge accounting:

  • The Forest & The Trees: Keeping Your Cash Flow Hedge Program in Perspective

    Every cash flow hedge program begins with the best intentions: Reducing the impact FX, interest rate or commodity volatility has on anticipated revenues and expenses.

  • FASB Hedge Accounting Exposure Draft: What You Need to Know

    On Sept. 8, the FASB released a new Exposure Draft on special hedge accounting, the objective of which is to make hedge accounting more accessible, simpler to achieve and easier to account for, at a greatly reduced risk of restatement. Hedge Trackers believes that this proposal will greatly benefit hedgers as their focus can return […]

  • Hedge Accounting Rules: Relief (Still) on the Way

    An exposure draft which will update current hedge accounting rules is in the works, though delayed. Hedgers can expect relief from some of the more onerous hedge accounting requirements.

  • Software Spotlight: Tips and Tricks

    CapellaFX software brings users improved economic effectiveness and operational efficiency, significant cost reductions, standardized controls and much more. Get even more from Capella with these operational tips and tricks and ensure your fourth quarter goes on without a hitch.

  • Identifying Sources of Risk Within Your Spreadsheets

    It’s no secret that hedge accounting can be extraordinarily complex – particularly when it comes to accounting for derivatives used to hedge anticipated revenue and expenses. Still, many professionals are using spreadsheets to administer their foreign currency hedge programs. This may be problematic for a number of reasons.

  • Making Hedge Program Analytics Actionable

    On a purely theoretical level, the goal of a balance sheet hedge program is to simply cancel out the effects of FX volatility on the books. If an exposure produces a loss, the theory goes, a derivative should produce an equivalent gain – offsetting the loss completely, and creating a net gain or loss of […]

  • Volatility and Interest Rate Hedging

    Major world events – like the recent “Brexit” vote – often wreak havoc on interest rate markets. Some produce a swift drop in rates. Others precipitate a general rise. Many are mixed. The only consistent, predictable element is unpredictability. While there is no way to keep major, market-affecting events from occurring, it is possible to […]

  • Software Spotlight: How to Setup Dual Trade Approval

    Capella offers customization with regards to FX approvals. As a system control you can require that approval be given before certain actions, such as trade execution or strategy use. The system administrator has access to the Security module and can setup the desired FX approvals.

  • Two Big Wins for Simplicity in Hedge Accounting

    The FASB met last Wednesday and made several key decisions on the long awaited hedge accounting exposure draft. The goal of the draft remains the same: “The proposed amendments are intended to better reflect an entity’s hedging strategies on its financial statements and reduce complexity in the hedge accounting model by making targeted improvements.”