FRS 39
Accounting Standards Council
“FRS 39 Financial Instruments: Recognition and Measurement”
Singapore
Reval allows clients to apply FRS 39 recognition and measurement standards, where and when appropriate, to their derivative instruments. Our solution to this hedge accounting standard allows Singaporean clients to:
- Define the hedging instrument for regulatory purposes.
- Link the hedging instrument with the corresponding hedged item.
- Designate the hedge relationship.
- Designate the type of risk(s) that is being hedged.
- Prepare the documentation required by auditors to record the hedging relationship, objective, and the strategy for undertaking the hedge.
- Generate reports to perform at inception and on-going assessment of hedge effectiveness using various methods including advanced regression analysis, stress testing, and dollar offset testing.
- Account for the gain or loss of a hedging relationship based on a fair value hedge, cash flow hedge, or hedge of a net investment in a foreign operation.
- Generate reports and ledger entries for the measurement of effectiveness and ineffectiveness of the hedge relationship over its life.
- Prepare proper accounting outputs, including equity or basis adjustment amounts and their adjustments related to foreign currency translation, foreign currency forward point amortization, option premium amortization, or the estimated releases of equity/basis adjustments expected to be reclassified within the next twelve months on an effective yield or straight line basis.
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