Corporate treasury departments accounting for derivatives under FASBs ASC 815 hedge accounting standard can now use a new software module from GTreasury to comply with the accounting standard update (ASU), effective January 2019 for public companies. GTreasury is an integrated SaaS solution for treasury and risk management.
Mandatory reporting is right around the corner, and our clients will be able to benefit now, says GTreasury Vice President of Market Development, Risk, Peter Seward. These are very positive changes to the North American hedge accounting standard that will bridge the gap between the accounting and economic outcomes of derivatives use, and will in most cases, help reduce P&L volatility. The release of our new module underscores GTreasury’s visual approach to complex topics, and it complements our well-known cash management and debt and investment offerings, reinforcing GTreasury’s position as a leading treasury and risk management system.
Using GTreasurys new module, companies can execute on:
- Relaxation of the change in the lesser of the cumulative change (30(b)) rule for cash flow and net investment hedges, resulting in reduced P&L volatility
- Hedging of the benchmark rate for interest rate fair value hedges
- Treatment of option time value, currency basis and FX forward points as excluded components of OCI
- Amortization of option time value and FX forward points
- Partial Term hedging of interest rate exposures
- Hedging of the contractually specified interest rate for IR cash flow hedges
- Qualitative retrospective effectiveness assessment
The FASB issued its final accounting standard update last August, with early adoption permitted. At that time, it reported: The new standard refines and expands hedge accounting for both financial (e.g., interest rate) and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes, for investors and analysts.
GTreasury is the leading innovator of integrated SaaS treasury and risk management solutions for the digital treasurer. Developed using the latest technology, GTreasury helps empower organizations on their path to strategic treasury, by enabling total visibility into their cash, liquidity, payments and financial risk management. With enterprise clients spanning North America, EMEA and APAC, GTreasury is headquartered in Chicago with offices in London, Sydney and Manila.