hedge acctgwebcast 8 nov finalweb
TRANSCRIPT
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 1/16
International Financial Reporting Standards
The views expressed in this presentation are those of the presenter,not necessarily those of the IASB or IFRS Foundation
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Hedge Accounting Webcast8 November 2010
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 2/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Hedge accounting relationship to riskmanagement
Risk managementobjective:
Seeks to linkrisk management and
financial reporting(top down)
Accountingobjective:
Seeks to managetiming of recognition
of gains or losses(bottom up)
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 3/16
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 4/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Effectiveness Assessment
Originalhedge ratio
Revised hedge ratio
New trend
Rebalancing
‘Perfect’ ratio with
benefit of hindsight
One (continuing) risk management and hedgeaccounting relationship
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 5/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Option Premium
Treatment as a cost of hedging -reflects economics
Intrinsic value (IAS 39)
Time Value(cost of hedging)
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 6/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Presentation of fair value hedges
•
Hedge Accounting in one place—
OCI
• Transparency for hedging effectiveness and
ineffectiveness
• Balance Sheet carrying amounts not adjusted
Comprehensive picture of hedge accountingeffects in one place
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 7/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Disclosures
Total entity risk exposure(no specific disclosure requirements)
Hedged exposure(Exposure torisks being
hedged)
IFRS 7Disclosurerequirements
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 8/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Next steps…
•
Deliberations on general hedge accounting modelhave been completed
– Board has asked staff to begin drafting
– Deliberations on portfolio hedge accounting to continue
• Exposure draft expected in Q4 2010
• Continued outreach
• IFRS in Q2 of 2011
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 9/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions or comments?
Expressions of individual viewsby members of the IASB andits staff are encouraged. Theviews expressed in thispresentationare those of the presenter.
Official positions of the IASB onaccounting matters aredetermined only after extensivedue process and deliberation.
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 10/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions
Could you please elaborate on hedging a component of risk for nonfinancial hedged items. Specially for items with a Fixed component whichis link to a commodity index?
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 11/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions
Why present fair value hedge differently?
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 12/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions
would the corridor effectively expand to 50200%?
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 13/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions
I do welcome any attempt to help accountingnot betray business decisions and riskmanagement. I understand that "macro" hedge
accounting is set aside to allow further
discussions. Can you please give us a flavour ofthe Board current view on this topic that is more
than impacting for retail banks for instance.Thank you.
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 14/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions
is the effectiveness test based on howmanagement measure risk?
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 15/16
© 2010 IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions
what in practice for premium on option(representing time value) ? Can it be capitalizedand taken in P&L when underlying impacts P&L ?
8/6/2019 Hedge Acctgwebcast 8 Nov Finalweb
http://slidepdf.com/reader/full/hedge-acctgwebcast-8-nov-finalweb 16/16