IFRS 9 Hedge accounting

Embedded derivatives Topics show Embedded derivatives Embedded derivatives under IFRS 9: the logic as it stands today Step 1 – What problem IFRS 9 is actually solving Step 2 – The one fork in the road that determines everything Step 3 – From economic understanding to structured decision-making A few examples to explain it all … Read more

Last Updated on 23/02/2020 by 75385885 Derivative Topics hide Derivative 1. Option transactions 2. Forward transactions – Don’t expect to understand them but al least you can read about them IFRS 9 Definition of derivative: A financial instrument or other contract within the scope of IFRS 9 with all three of the following characteristics. its … Read more

Topics hide Designated hedged items Definition of hedged item Risk components of non-financial items Hedging groups of net positions Hedging layers of a group Aggregated exposures Designated hedged items This narrative provides an overview of the eligible hedged items that are permitted in IFRS 9. Definition of hedged item Under IFRS 9, a hedged item … Read more

Topics hide Designated hedging instruments Derivative financial instruments – Non-derivative financial instruments measured at fair value through P&L Embedded derivatives Purchased options Forward contracts Accounting for currency basis spreads Designated hedging instruments Most derivative financial instruments can be designated as hedging instruments, provided they are entered into with an external party. Intra-group derivatives or other … Read more

Fair Value Hedges In short – A fair value hedge is a hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm commitment, or components of any such item, that is attributable to a particular risk and could affect profit or loss. Fair value hedges recognize … Read more

Topics hide Cash Flow Hedges Example of a Cash Flow Hedge Case – Accounting for a Cash Flow Hedge (Setting up the Cash flow hedge reserve) Example of the Accounting for a Cash Flow Hedge of a Forecast Transaction Resulting in the Recognition of a Non-financial Asset Example of the Accounting for a Cash Flow … Read more

Topics hide Derivative meaning Accounting Example derivatives Gross/Net Settlement Small initial net investment Non-financial variables Hedge accounting qualification criteria Hedge effectiveness Hedging instrument Hedged Items Discontinuation of hedge accounting Aggregate exposures Derivative meaning A derivative, by definition, is a financial instrument or other contract within the scope IFRS 9 with all three of the following … Read more

Topics hide Hedge of forecast FX purchases The Case – Type of hedge: Cash flow hedge FX risk management – Headlines only Hedging accounting policy disclosures – Headlines only Hedging instruments Hedging relationship Hedge documentation Hedge effectiveness Hedging accounting entries Hedge documentation – Headlines only Risk management objective Hedging relationship Identification of hedging instrument Hedge … Read more