Understanding Hedge Accounting


Overview
In this two-hour webcast, you will learn about the requirements for derivative and hedge accounting contained in ASC 815 Derivatives and Hedging (formerly FAS 133). The webcast begins with an overview of ASC 815 and its requirements to qualify a hedge transaction for special hedge accounting treatment.
 
It will cover documentation requirements and how to establish that a proposed hedging transaction will be effective in mitigating risks – including “short cut” method, critical terms matching, and analytical approaches. It also covers the subsequent accounting for changes in fair value of derivatives used as hedging instruments, including the determination of effective and ineffective portions of those fair value changes. In addition to accounting for hedges, the webcast discusses the footnote disclosures required for derivatives and hedges.   The webcast concludes with a discussion of what auditors typically look for when reviewing hedges.

Objectives
Upon completion of this course, participants will be able to:

  • Understand the major provisions contained in ASC 815.
  • Understand the requirements for establishing hedge effectiveness.
  • Prepare required documentation at hedge inception to qualify for hedge accounting treatment.
  • Calculate the effective and ineffective portions of a change in a hedging instrument’s fair value.
  • Understand what disclosures for derivatives and hedges are required in the footnotes to financial statements.
Emphasis
  • Understanding ASC 815.
  • Documentation requirements for hedge accounting treatment.
  • Accounting for changes in derivatives fair value.
  • Preparing footnote disclosures.
Who Will Benefit
Corporate accountants, treasury professionals, analysts, consultants, regulators, auditors, financial engineers and others who are involved in an enterprises risk management activities.

Prerequisite
A basic understanding of time value of money concepts and commonly-used derivatives for hedging purposes

Preparation
No advance preparation required

Level of Knowledge
Intermediate

CPE Credit
2 Hours

Delivery Method  
Group Internet Based

NASBA Field of Study
Accounting

Author
Charles Yager