This comprehensive two-day course provides an in-depth review of the current IFRS accounting and reporting requirements for derivatives and hedging.

IFRS 9 has replaced IAS 39 for annual periods beginning on or after 1 January 2018. The organizations can however elect to continue with IAS 39 hedge accounting until the IASB’s separate project on macro hedging is completed. IFRS 9 hedge accounting has a significant impact on financial and non-financial organizations and makes hedge accounting widely available. It is therefore important for entities to understand the hedge accounting principles in IFRS 9 .

The requirements for derivatives and hedging are explained in clear, simple language and illustrated with corporate annual reports and other real-world examples. Valuations, hedge documentation processes, effectiveness testing, and journal entry outcomes are explained and illustrated by the specialist instructor.

This program answers questions such as:

  • What are the requirements for hedge accounting?
  • How does classification of financial instruments affect the decision to use hedge accounting?
  • What is fair value?
  • What are the hedge accounting documentation requirements?
  • How is hedge effectiveness designed and tested?
  • How can hedge engineering work to achieve better results?
  • How are embedded derivatives identified and accounted for?
  • What are the principal similarities and differences between US GAAP and IFRSs in the area of derivatives and hedge accounting?

Learning Objectives

  • Understand the reasons why companies hedge
  • Construct a successful hedge and use hedge engineering to achieve better results
  • Measure hedge effectiveness and ineffectiveness
  • Identify and account for the following hedges: fair value hedges, cash flow hedges, net investment hedges and portfolio hedges of interest rate risk (macro hedges)
  • Identify and analyze embedded derivatives
  • Determine the appropriate treatment of embedded derivatives under IAS 39 and IFRS 9
  • Discuss the latest developments

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Skill Level: Beginner