IAS 39
International Accounting Standards Board
“Financial Instruments: Recognition and Measurement”
Reval allows clients to apply IAS 39 recognition and measurement standards, where and when appropriate, to their derivative instruments. Our solution to this hedge accounting standard allows clients to:
- Define the hedging instrument for regulatory purposes under IAS 39.
- 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.
- Generate reports and ledger entries for the measurement of effectiveness and ineffectiveness of the hedge relationship over its life.
- 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 under IAS 39.
- 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 12 months on an effective yield or straight line basis.
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