Transforming Your Treasury Data with Reconcile to Zero (RTZ)
One of the most difficult and frustrating exercises in treasury is understanding and communicating the results of a balance sheet hedge program.
The GTreasury Blog
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Commodity Price Risk Hedging: Risks You Should Know
The treasury department of an organization is often responsible for mitigating foreign currency, interest rate and commodity price risk. Most of the derivatives used to manage that risk are negotiated by Treasury … but this is not always the case for commodity risk management.
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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.
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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.
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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?
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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.
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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).
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8 Risks of Spreadsheets in Treasury & How a TMS Can Help
In the late 1990s and into the early 2000s, the spreadsheet was the treasury and accounting tool of choice. Computer programs were still relatively primitive, and the smart phone had not yet arrived. Business professionals leaned heavily on spreadsheets due to their flexibility, powerful set of available formulas and relative ease of use.
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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.
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A Voice for Corporates: The AFP LIBOR Task Force
David Bowman with the Federal Reserve Board has asked the Association for Finance Professionals (AFP) to be the voice of Corporate Treasury in terms of addressing LIBOR for the Alternative Reference Rates Committee (ARRC) as part of the Coordination Subgroup.
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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.
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All-in-One vs. Best-of-Breed Treasury Technology
For many years, corporations had to decide if they should purchase an all-in-one or best-of-breed treasury workstation.
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FASB Approves Finalization of LIBOR Transition Guidance
As you know, the LIBOR transition topic is evolving on an almost daily basis. Earlier this week, the FASB approved the finalization of guidance to assist entities with the transition away from LIBOR. The new Accounting Standards Update (ASU), which is expected to be issued in early 2020, will include optional expedients and exceptions to accounting guidance.
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10 Reasons Why Companies Hedge Foreign Currency Risk
How and why companies hedge foreign currency risk depends on factors such as the industry, risk management acumen and management team perspective. But most public corporations do hedge their FX risk for one reason or another.
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Interest Rate Reform and Implications on Foreign Currency Derivatives
What’s the Issue? Britain is ending support of the London Interbank Offered Rate (LIBOR) on or about 2021. US regulators currently plan to replace LIBOR with the Secured Overnight Financing Rate (SOFR) curve. The pending “Illiquid LIBOR Market” and related lack of transparency will render valuations of LIBOR priced instruments troublesome.