2017 promises to be an important year for derivative users, as significant modifications to the related accounting literature are on the horizon. This course offers the guidance necessary for a smooth transition from the old to the new.
While the basic orientation of the original standard still applies, the new material -- the focus of the seminar -- may allow for some expansion of eligible “hedging relationships,” for which hedge accounting may reasonably apply. Additionally, the new rules also liberalize procedures relating to the assessment of hedge effectiveness, which, in turn will likely motivate modifying existing hedge documentation. Special attention is devoted to these topics.
The course is directed to both treasury and accounting professionals. Although some derivatives may be
highly sophisticated and esoteric instruments, the vast majority of hedgers use plain vanilla contracts in textbook
applications for a host of financial exposures relating to interest rates, foreign exchange rates, and commodity
price exposures. This seminar is designed for just these types of companies. It takes the mystery out of both
the instruments and the accounting.
While derivative users may legitimately apply alternative accounting treatments to common
transactions, special hedge accounting is invariably preferred by most public companies. This preference largely derives from the fact that hedge accounting typically, makes the intent
of the hedging activity transparent to readers of financial statements, and it also generally minimizes the volatility of
reported earnings. This treatment, however, is not automatic. This seminar covers these prerequisite requirements for qualifying for hedge accounting and details how to satisfy them.
The course offers a foundation that covers plain vanilla derivative products (i.e, futures, forwards, options, and swaps) - how these contracts work as well as the associated accounting treatments, highlighting differences between the original standard and the new revisions. Following that foundation and coverage of the generic accounting requirements, we delve into the nuances relating to specific market sectors: interest rates, commodities and currencies.
Attendees will gain a clear understanding of how derivatives accounting rules are to be applied and how the resulting earnings, OCI allocations, reclassifications, and disclosure amounts should be calculated. Our "hands-on" case studies, woven through the course, have been designed to make these concepts and procedures accessible.
5/23-5/24/2017 New York
Venue and Hotel Details
- Introduction to Derivatives
- ASC Topic 815 (FAS 133) Definitions
- Alternative Accounting Treatments
- Interest Rate Swap Case Study
- Documentation Requirements
- Review of FAS 52 Issues
- Foreign Currency Hedging
- Interest Rate Hedging
- Recent Developments under U.S. GAAP and IFRS
- Other Related Topics
Baseline understanding of U.S. GAAP Accounting
Level of Knowledge:
Field of Study:
Group Live, Instructor-Led Course
Dr. Ira Kawaller, Founder, Kawaller and Co., a consultancy specializing in derivative use.
This course is co-presented by a KPMG Professional with specialized knowledge in the subject matter.
“The class was really successful in that there was combined expertise in derivative accounting and derivative economics.” - VP Controller and CAO, Public Energy Company