Reval’s Okochi, PwC’s di Paola, RTL’s Masquelier and Lloyds’ Kruger Fight to Get Hypothetical Derivative Method with

New York, December 12, 2007 – Reval CEO, Jiro Okochi drives people to "Save My Options" Web site: with his Letter to the Editor of CFO Europe magazine in the current December/January issue and calls for the industry to submit their comments via the site’s petition to the IASB. Okochi appeals to CFOs who like hedging with options to oppose the "proposed amendment (Paragraph AG99E) to IAS 39 that would define and eliminate a favourable method for treating time value of vanilla options." Other industry leaders join the fight to get the hypothetical derivative method.

Sebastian di Paola, Partner, Treasury Solutions at PricewaterhouseCoopers is quoted on , "It is unfortunate that the IASB does not appear to recognise that one-sided risks inherently contain time value and should be modelled as hypothetical options. By taking this restrictive line the Board will be giving IFRS reporters a less favourable treatment than their US GAAP counterparts. Fortunately this is only a proposal so companies can still comment, and hopefully the IASB will see the light before this change goes live".

François Masquelier, Senior Vice President of Treasury & Corporate Finance at RTL Group and Honorary Chairman of EACT supports the fight and is quoted saying, "On behalf of all the members of the EACT and ATEL, we strongly encourage the IASB to reconsider this amendment which may end up destroying shareholder value as all companies face volatile financial markets and need to more easily use options to hedge."

The site offers a downloadable analysis entitled "Vanilla Options and Time Value Volatility-a Critical Analysis" from IFRS Consultant, Johann Kruger at Lloyds TSB Financial Markets. Kruger is also quoted on the site, "The saying ‘you manage what you measure’ is core to treasury activities. Disallowing the use of hypothetical options to model one sided risks will increase income statement volatility and undoubtedly further reduce companies’ freedom to use vanilla options, causing greater disruption to the balance in companies’ hedge portfolios. We strongly encourage the IASB to issue guidance explicitly allowing their use."

Reval CEO, Jiro Okochi said, "If there is ever a time to raise your voice on IAS 39 now is the time. Corporations under IFRS should be allowed this choice, just as US companies are under FAS 133, para G20."

The site’s online petition to the IASB is open until January 11, 2008. For more information, visit


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