Hedge Accounting
Companies use derivative instruments as a way to hedge risks. Whether it’s an interest rate swap, currency hedge, or commodity transaction, the updated accounting rules demand that these instruments are accounted for correctly.
Many organizations don’t have the necessary staffing to manage the cumbersome hedge accounting process. Rede Consulting can reduce the burden of hedge accounting, valuations, and financial reporting. Our hedge accounting team is dedicated to assisting clients in successfully navigating the complexities of ASC 815 (formerly FAS 133) or IAS 39 and helping them align the optimal economic hedging structures with the most appropriate and favorable accounting treatments.
By matching the timing of the earnings recognition of the derivative with the hedged asset, liability, or forecasted transaction, companies can significantly reduce or eliminate earnings volatility that otherwise would be recognized in the financial statements.