Foreign exchange hedging in IFRS
  • Financial instruments and hedging tools - Be familiar with financial instruments and hedging tools (fair value hedge /cash flow hedge, titirisation, credit derivatives, hybrid debt)
  • Financial risks: counterparty, liquidity, interest rates, exchange rates, marketable securities - Analysis, valuation, risk mapping and hedging strategy: - Counterparty risk: financial analysis and control of rating practices (internal, external) - Liquidity risk: ALM and group cash flow forecast - Interest rate risk: fixed and floating rate debt, bond issues - Foreign exchange risk: exports, imports, hedging, forward - Securities risk: dividends, acquisition and disposal of securities, trading room - Project & investment related risk Managing the identification and valuation of financial and non-financial risks
  • Financial statements and notes - Know the balance sheet, the income statement, the cash flow statement, the statement of changes in shareholders' equity, the OIC, the notes.
  • IFRS standards - International Financial Reporting Standards

Target audience

- Accounting managers
- Auditeurs internes
- Bankers / Account Managers
- Chartered Accountants, Statutory Auditors
- Consolidation and Accounting Directors
- Consolidation managers
- Consolidators
- Financial managers
- Treasurers

2 day

Prerequisites

This training does not require any particular prerequisite.

Objectives

– Know the main forex hedging instruments (forward swaps, options,…)
– Understand the main strategies for hedging firm c risks (signed contract) or contingent risks (budget, submitted bid, …)
– Be able to apply hedge accounting according in IFRS

Detailed content

> The different types of forex risks: transaction risk (firm or probable), conversion risk (risks associated with converting foreign subsidiaries’ profits and net assets)

> Forward contracts (forward sale or purchase of foreign currencies)

– Swap points or forward points
– Using a forward contract as a hedge
– Valuation
– Updating the hedge (rollover or swap)

> Forex options

– Understanding how an option works and how it used as a hedging instrument
– Valuation principles, splitting intrinsic value and time value

> Hedging contingent forex risk

– How does it work? Constraints and limits.

> Hedge accounting under IFRS 9

– The three hedge accounting mechanisms: Fair Value Hedge (FVH), Cash Flow Hedge (CFH), and Net Investment Hedge (NIH)
– The different scenarios for hedging foreign currency firm commitments
– The treatment of forward points and of options’ time value

> Conditions and constraints of hedge accounting under IFRS 9

– Effectiveness test and the treatment of ineffectiveness
– Termination of a hedge relationship (disqualification) and rebalancing
– When hedge accounting cannot apply

Why should you attend?

The adoption of IFRS has not only transformed the accounting for hedging instruments and hedged transactions, but it has also led to many companies to revisit their hedging strategies. IFRS 9 brings changes to acceptable hedging schemes and their accounting treatment.
This training gives you the keys to understand, account for and audit financial instruments and hedging strategies.

Training methods and assessment

Technical developments presented with real-world illustrations, and numerous practical cases (valuation calculations are made on Excel during the training).
A final quiz assesses the acquisition of knowledge.
Assessment questionnaire.
A training certificate is delivered at the end of the session.

The trainer is available by e-mail to answer any follow-up questions participants may have.

Price

1 840 € Excl. VAT – 2 208 € Incl. VAT

Médias

Témoignages

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Jonathan C.
Entreprise
Formation