Derivatives & Hedge Accounting
Understand derivatives and their uses as hedging instruments, specifically how to apply FAS 113 (ASC 815) and amendments to hedge accounting situations.
Prerequisite knowledge:
- Familiarity of GAAP accounting principles
- Understanding of time value of money concepts
- Knowledge of commonly used derivatives for hedging - forwards, futures, swaps and options
Learn now pay later with
To make it even easier to learn, you can finance your program through Affirm.
Loans offered through Affirm are available in the U.S. and Canada.
Module 1: Introduction to Derivatives
- Nature and Purpose of Derivatives
- Examples of Common Derivatives
- Infamous Derivatives Scandals
- Put and Call Options
- Forwards and Futures Contracts
- Interest Rate Swaps
Module 2: Accounting for Derivatives
- Advantages of Hedge Accounting
- Qualifying for Hedge Accounting
- Hedging Designations: Fair Value vs. Cash Flow Hedges
- Firm Commitments vs. Anticipated Transactions
- Assessing & Documenting Hedge Effectiveness
- Accounting for Hedge Ineffectiveness
Module 3: Fair Value Hedges
- Accounting for Fair Value Hedges
- Impact on Current Period Earnings
- Exposed Assets & Liabilities as Fair Value Hedges
- Firm Commitments as Fair Value Hedges
- Impact of a Discontinued Hedge
- Documentation Requirements
Module 4: Cash Flow Hedges
- Accounting for Cash Flow Hedges
- Impact on Current Period Earnings
- Exposed Assets & Liabilities as Cash Flow Hedges
- Cash Flow Hedges of Forecasted Transactions
- Impact of a Discontinued Hedge Documentation Requirements
Module 5: Interest Rate Swaps
- Economics of Interest Rate Swaps
- Interest Rate Swaps as Fair Value
- Hedges and Cash Flow Hedges
- Testing for Hedge Effectiveness
- Valuation Methods for Interest Rate Swaps
Module 1: Interest Rate Risk
- Interest Rate Futures and Options
- Cash Flow Hedge of Anticipated Issuance of Debt
- Cash Flow Hedge of Anticipated Purchase of Securities
- Cash Flow Hedge of Interest Income using Floor Contract
Module 2: Foreign Currency Hedges
- Foreign Currency Hedges
- Cash Flow Hedges of Foreign Currency Receivables & Payables
- Cash Flow Hedge of Foreign Currency Debt
- Hedging Foreign Currency Debt using Currency Swaps
- Fair Value Hedge of a Firm Purchase Commitment
- Cash Flow Hedge of a Forecasted Transaction
- Hedge of a Net Investment in Foreign Operations
Module 3: Embedded Derivatives
- Identifying Embedded Derivatives
- Valuing an Embedded Derivative
- Accounting for Embedded Derivatives
- Bifurcation Tests
- Fair Value Option
Module 4: Exceptions & Exclusions
- Normal Purchases & Normal Sales Scope Exclusion
- Insurance Contracts
- Financial Guarantees
- Other Scope Exceptions
Module 5: Current Developments & Trends
- Latest Guidance on FAS 133 (ASC 815) Implementations Issues
- New and Proposed Accounting Standards affecting FAS 133 (ASC 815)
- Comparisons with IFRS