Online Seminar: Optimizing Currency Risk Management – An Introduction to FAS 133/ASC 815October 06, 2011 Posted by: Dave Bhagat
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Article: Fundamentals of Hedging For Corporations with Foreign Exchange Risk (PDF)
Companies increasingly generate revenues and incur costs in different currencies, creating currency risk. Heightened volatility in the foreign exchange markets has increased the level of risk that companies face, even as their exposures grow.
Foreign currency hedge programs are designed to address that risk by protecting profitability and improving visibility. There are accounting rules that allow the protection and visibility of the hedge to be reflected in your financial statements.
In this replay we briefly review how hedge programs protect a company's cash. We then discuss how standard hedge accounting works, followed by an overview of the benefits of "special cash flow hedge accounting."
Questions we address during this seminar include:
What do (and don't) hedge programs deliver?What are the benefits, costs and risks of "special hedge" accounting?Given all the "red tape," when does special hedge accounting make sense?What are the key requirements...Read More