Posts Tagged ‘long-haul’

Conflicting 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.”

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Late Term Hedging of IR Risk Under FAS 133

Given the steepness of the yield curve , many companies are considering (and many banks are pitching) the strategy of swapping existing fixed rate debt into variable so companies can enjoy positive carry-over over the next few resets. While this strategy may make sense for certain companies from an economic perspective, the accounting ramifications under…

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