The Financial Accounting Standards Board enacted new rules for derivatives and hedging to take effect at the start of 2019. The new standards eliminate many of the obstacles companies face when trying to implement hedge accounting programs.
However, fewer companies than expected transitioned to the rules before the required effective date. As a result, they may have missed a critical opportunity to improve their hedge effectiveness. CEO Helen Kane explains how the new FASB reporting standards manifest differently due to varying hedge strategies – and why preparations for the standards were so minimal.
“They’ve decided it wasn’t worth changing the processes and procedures to take advantage of what are clearly highly effective hedge relationships and could have been supported by the facts,” she says.