Posts Tagged ‘reval’
THE IASB HEARS THE CONCERN OF THE 90 PERCENT ON IFRS 9 FATAL FLAWS
Reval recently asked corporations that apply IFRS across the globe their opinion on the latest IFRS 9 Review Draft. In particular, Reval wanted to know how they felt about the controversial treatment of hypothetical derivatives embodied in Paragraph B6.5.5. This paragraph currently outlines how hypothetical derivatives, and by implication the exposures themselves, cannot include elements…
Read MoreBack to the Future: House Votes to Put Margin Exemption Back into Dodd-Frank
This week the U.S. House of Representatives voted 370-24 to amend Dodd-Frank to allow non-financial end users to be exempt from being required to post margin for OTC derivative trades.
Read MoreOTC Derivative Volumes Rise: But Do We Know Why?
The Bank for International Settlements reported that OTC derivative volumes increased to a record $708 trillion, up 18% for the first half of 2011. I have some theories on why.
Read MoreHurricane Irene: Operational Risk Can Hit Close to Home
I originally started this blog as I watched the Tsunami tragedy unfold in Japan. But then thought it may not relate well with readers in the US or Europe, far away from nuclear reactors built on the “ring of fire.” Then in July, I was stranded in New Zealand by excessive snowfalls and watched as…
Read MoreOCI Releases: Restatement Risk from the Finer Points of Hedge Accounting
Reval Solution Consultant Shane Randolph says “…when regulators re-focus their attention on hedge accounting within the next two to three years, we will see the next round of restatements focus on the finer points of hedge accounting. One of those areas involves releases from other comprehensive income (OCI).”
Read MoreIFRS 9 Hedge Accounting: Missed Deadlines Creates Uncertainty
The delay of IFRS 9 hedge accounting (phase III) is disappointing news for many; particularly the commodity and option hedgers who were hoping to take advantage of the more favourable provisions in the new standard as soon as possible.
Read MoreIFRS 9 Business Model Test – A Challenging New Principle
Under IFRS 9, IASB has taken a more simplified approach by reducing the classification to two categories: amortized cost or fair value.
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 MoreWhen Opposites Distract – FASB and IASB
When the FASB and the IASB started talking about the convergence of accounting standards back in 2006, the road map was pretty optimistic. Now the path to convergence is clearly widened further. No doubt its exposure draft issuance will coincide with the holiday period with comments due by September, so don’t forgot your laptop when your pack your suitcase.
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