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.
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.
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.
For many years, corporations had to decide if they should purchase an all-in-one or best-of-breed treasury workstation.
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.
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.
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.
LIBOR has been referred to as the plumbing buried in many financial contracts, and the end of LIBOR will cause a seismic shift in the financial markets.
If you use Hedge Trackers’ Outsourcing and/or Software suite (Capella) services, you might be wondering what’s going to happen when interest rate reform occurs and SOFR replaces LIBOR in early 2021.
Rates & Recession: What Happened? Last Wednesday, The Fed lowered its target for the federal funds rate by a quarter percentage point, to a range of 1.75% to 2%.
Digital Treasury is the latest trend that’s slated to transform corporate treasury departments — and organizations as a whole.
As a follow up to FASB’s June initiative to provide accounting relief to organizations that will need to modify their contracts as LIBOR is replaced by SOFR, FASB released a proposed Accounting Standards Update on Thursday.
Technology adoption in treasury is moving at a lightning pace. Treasurers view legacy processes such as printing checks, aggregating prior day cash balances and gathering manual foreign currency exposures as (soon to be) things of the past. Much like technology has become an integral part of our personal lives, the landscape for Treasurers is evolving […]
In order to mitigate foreign currency gains and losses, companies routinely hedge away currency risk associated with balance sheet exposures. Companies need to identify all monetary accounts on the balance sheet and aggregate the foreign amounts in those accounts.
Balance Sheet Exposures Balance sheet exposures are the drivers of the FX Gains and Losses that impact earnings every month. They are monetary accounts like cash, accounts receivable, accounts payable, inter-company balances and more that are denominated in foreign currencies, so their values fluctuate and they are reported as gains/losses on a company’s financials. The […]