Leading Hedge Program Consulting Firm Reacts to FASB Hedge Accounting Exposure Draft
Hedge Trackers, a premier provider of hedge program management solutions for foreign currency, interest rate and commodity risk, today noted with interest the release of a new Financial Accounting Standards Board (FASB) Exposure Draft dealing with hedge accounting rules.
The draft contains language that would make hedge accounting more accessible and simpler to achieve and maintain. Particular proposed changes include the elimination of requirements to quantify effectiveness or report ineffectiveness of hedge relationships; elimination of the requirement to reaffirm through testing the hedge relationship on an ongoing basis; and a new ability for commodity hedgers to bifurcate certain contractual risks and hedge them separately.
The draft’s issuance begins a 75-day comment period, during which time interested stakeholders can provide feedback to the FASB. Upon the end of the comment period, the draft will be modified, accepted or rejected during a redeliberation process. The mandatory adoption date will be scheduled when a final draft is released, but early adoption will be permitted beginning the first quarter after issuance of the updated ASU.
“The proposed modifications to GAAP represent great news for corporate hedge programs,” said Helen Kane, founder and president, Hedge Trackers. “This simplification of hedge accounting rules and requirements puts the focus back on the economic results of hedging, rather than artificially created accounting results. We encourage our clients and all members of the corporate hedging community to educate themselves on the Exposure Draft and provide comments to FASB. It is of exceeding importance that comments focus not only on perceived problems with the draft; offering feedback on positive aspects will help ensure the proposed benefits become part of GAAP.”
About Hedge Trackers, LLC
For more than a decade, Hedge Trackers’ globally compliant financial accounting and reporting services have empowered U.S. corporations and financial institutions to effectively and confidently hedge foreign currency, interest rate, and commodity risk. Hedge Trackers offers unparalleled derivative accounting capabilities, consulting services and software solutions, all underpinned by more than a decade of experience. The Silicon Valley-based company has set up successful hedge programs for hundreds of Fortune 100 to Fortune 1000 clients. For more information, visit the company at www.hedgetrackers.com or follow Hedge Trackers on LinkedIn and Twitter.