Hedge Accounting

Hedge accounting is a crucial tool for many corporates to manage their P&L volatility. However, setting up and maintaining an effective hedge accounting process poses treasurers with several challenges. We unburden you by providing end-to-end advice and execution of the hedge accounting process. Our track record spans more than a decade of providing excellent service to dozens of clients. Find out how we can help you take control of hedge accounting.

Uncertain times posing challenges

In uncertain times, with high market volatility, it is imperative to have a well-defined hedge accounting process and flawless execution. The hedge effectiveness of the hedge accounting relationship may be compromised, or the hedged exposure may disappear resulting in an immediate P&L effect. By taking control of these issues, you can focus on what is really important for your operation!

Regulatory landscape

Hedge accounting provides the alignment of the accounting treatment of your hedged item with the hedging instrument. Hedge accounting can be applied subject to compliance with the requirements set out in IFRS 9/IAS 39, RJ 290 or ASC 815. Adhering to these requirements can be complicated and challenging. Furthermore, the introduction of IFRS 9 has led to some changes in the hedge accounting requirements. Read more about these changes in this article.

Zanders Hedge accounting service

The Valuation Desk is experienced with hedge accounting for a variety of hedge relations, ranging from the most common interest rate hedges to complex commodity hedges. We can assist on all phases of the hedge accounting process, such as:

drafting hedge accounting policies;
creating of a hedge relation;
drafting the hedge accounting documentation;
set-up and valuation of hypothetical derivatives in compliance with IFRS 9/IAS 39, RJ 290 or ASC 815;
valuation of hedging instruments in compliance with IFRS 13;
hedge effectiveness testing (qualitative and quantitative); and
determination of OCI and P&L bookings.

By incorporating our expertise in derivative valuations, we deliver accurate, reliable calculations to prove the effectiveness of the hedges implemented. Our hedge effectiveness calculations are approved by accounting firms.