GTreasury Blog – Page 2 of 3 –

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.
Monetizing FX Hedges to Boost Cash Flow: Essential Strategies

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.
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.
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.
How the Coronavirus May Impact Your FX Cash Flow Hedge Program

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.
Best Practices for FX Hedge Performance Reporting

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.
5 Challenges of Year-Over-Year Constant Currency 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.
3 Hurdles to Overcome When Starting a Cash Flow Hedge Program

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.
How to Use Hedge Accounting to Align Derivatives & Currency Gains/Losses

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.
Is Your Balance Sheet Hedge Putting Your Cash at Risk?

Most treasury professionals are comfortable gathering and netting down same currency exposures that go in opposite directions.
3 Keys to FX Translation Accounting

Translation and transaction accounting are often confused for one another — but the difference between them is important. How can you tell them apart?
How & When to Use Exchange Rates

If your company transacts internationally, you know you need to use exchange rates to not only convert foreign currency transactions from the local currency into USD but also to translate foreign currency financial statements.
4 Essential Facts to Demystify Basic Cash Flow Hedges

Cash flow risk is defined as the variability of functional cash flows for an anticipated transaction or on an existing asset/liability due to a particular risk (in this case, foreign currency risk).
How to Determine Functional Currency Following New Guidance

ASC 830 provides guidelines on how to determine the functional currency of an entity. This is typically an election made by management based on the economic environment in which the company operates — but the process is more complex than that.
Restoring Economic Integrity in Foreign Currency Hedging

Treasuries use cash pooling — also known as a cash sweeping system — to provide liquidity to legal entities, aggregate cash for investment or to accelerate debt repayment.