Posts Tagged ‘ASC 815’
IFRS 9 Hedge Accounting Jeopardizes Convergence Dream
In September this year, the International Accounting Standards Board (IASB) finally issued the Review Draft for Hedge Accounting, phase three of the replacement project for IAS 39 (under the banner of IFRS 9). Although this is not the final draft of the standard, the IASB do not expect any changes between now and the final…
Read MoreMore Clarity on the End-User Clearing Exemption: FAS 133 (ASC 815) Ratified, Small Banks in Limbo
The big fear of just relying on FAS 133 was for all of the end-users who would not get the clearing exemption because either they could not be bothered to comply with FAS 133 or because their hedging programs did not work well under FAS 133, like many commodity hedges. The CFTC’s approach does allow the flexibility to leverage FAS 133 documentation where a company can and use other approaches where a company cannot.
Read MoreAre You An MSP? FAS 133 (ASC 815) Bringing Some New Value
This week the CFTC issued its definitions around the controversial Major Swap Participant (MSP) category required by the Dodd-Frank bill. The intent of the bill was to capture previously unregulated (i.e. non bank) active swap participants who could cause systemic risk.
Read MoreIASB Set To Announce IAS 39 Changes Under Phase III of IFRS 9 ED: Major Divergence from Son of FAS 133R
With the last meeting on hedge accounting completed by the IASB, it is widely expected that at long last Phase III of IFRS 9 ED will be released in the coming weeks. From what we are hearing, there are several dramatic divergences from what the FASB has proposed for changes to FAS 133.
Read MoreSwap Data Repositories (SDRs): Most Complex, Challenging Component of Dodd-Frank
I had the honor of participating at the joint CFTC/SEC public round table today on the topic of the Swap Data Repository (SDR). The session, which can be found at www.cftc.gov, covered a wide range of topics ranging from data standardization to confirmation workflow to reporting requirements to governance issues.
Read MoreSo Much for Summer Doldrums: From Whipsaw in Wheat to S&P to Euros to Economy
The summer is supposed to be the time where you can catch up on your FASB reading at the beach or get to the bottom half of your work to-do-list. Unfortunately, the markets and the U.S. Treasury printing presses are not taking any time off.
Read MoreConflicting Messages: Death of Short Cut vs Death of Quantitative Assessment
While many will commend the FASB for mandating measurement in all circumstances, it seems odd to go the other direction by eliminating the highly effective criteria under the current quantitative assessment requirement. The FASB states that “eliminating the shortcut method and the critical terms match method would result in a more consistent model for assessing hedge effectiveness.”
Read MoreImporters Beware – IFRS 9 Could Result in Lost Margin
One of the proposed changes from IAS 39 in the new standard IFRS 9 is the removal of the ability to make ‘basis adjustments’ to non-financial hedged items. This could be a major issue for many importers who hedge their currency risk. The whole process of capturing gross margin in the ERP/Stock Management system may need to change or importers may risk losing margin on sales.
Read MoreThe final death of Short-Cut & Critical Terms Match under ASC 815 (FAS 133)
After FASB issued its long awaited Exposure Draft (ED) on Financial Instruments on May 26th, we held a series of client briefings and events and the general consensus is that change is not good. In particular, the elimination of the abbreviated methods under ASC 815 (FAS 133), Short-Cut for interest rate hedging & Critical Terms…
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