Hedge accounting training under IFRS and French GAAP

Prerequisites

You need to know the main principles of compatibility.

Objectives

◗ Exploring the challenge of neutralizing volatility in financial statements

◗ Analyze the functioning of the most common derivative instruments

◗ Mastering accounting treatment under IFRS and French standards

◗ Identify the differences in treatment between the two reference systems

Training program

◗ How the most common hedging derivatives work

- How forward FX trading works
- Spot/forward rates, forward points (swap points)
- FX forward valuation

✔ UNDERSTANDING | Illustration: explanatory video on how an FX forward works
✔ APPLY | Case study: hedging and valuation of FX forwards
✔ ASSESS | Quiz on how FX forwards work

◗ How an interest-rate swap works

- Hedging and recovery

✔ UNDERSTAND | Illustration: video explaining how an interest-rate swap works.
✔ APPLY | Case study: negotiating and valuing an interest-rate swap
✔ EVALUATE | Quiz on how an interest-rate swap works

◗ How a cross currency swap works

- Use of a CCS to hedge a foreign currency debt

✔ UNDERSTAND | Illustration with a flow chart
✔ APPLY | Case study: impact of exchange rate fluctuations on a foreign currency debt
and on the CCS

◗ Currency option

- Operation of a vanilla option and a tunnel: use in hedging
- Valuation: separating intrinsic value from time value

✔ UNDERSTANDING | Graphical illustration of whether or not an option is exercised.
✔ APPLY | Practical case: valuation of an option, calculation of intrinsic value,
analysis of time value variation
✔ ASSESS | Quiz on how options work

◗ Accounting under French GAAP - Statutory vision

- Hedging transactions covered by the standard
- A social view only
- Position types: hedging, optimization with and without risk-taking, and isolated open positions
- Fundamental principles of hedge accounting

✔ APPLIQUER | Case study: hedging a supply with an FX forward
✔ APPLIQUER | Case study: hedging a variable-rate debt with an interest-rate swap

◗ Hedge accounting under IFRS 9 - Consolidated view

- Why hedge accounting, the "accounting mismatch"?
- Three hedge accounting mechanisms FVH, CFH and NIH, the principles

✔ APPLY | Case studies :
- Hedging a CA with a forward currency purchase (CFH)
- FVH and CFH hedging of a foreign currency debt with a cross currency swap
✔ UNDERSTANDING | Illustration of the impact of NIH hedging on a foreign subsidiary:
- Hedging intercompany transactions
- Hedging conditions and constraints under IFRS 9, effectiveness tests and
treatment of ineffectiveness
✔ UNDERSTANDING | Summary table of application cases and compared treatments
different hedge accounting methods:
- Breaking the hedging relationship (de-designation) and rebalancing
✔ APPLY | Case study: determining the cases in which hedge accounting can be
of hedge accounting

Why choose this course?

Hedge accounting is one of the most technical areas of accounting. It requires expertise in derivative financial instruments (swaps, forwards, options, etc.), in-depth knowledge of the accounting rules specific to IFRS (in particular IFRS 9) and French accounting standards (PCG and ANC regulations), and the ability to manage discrepancies in treatment between standards, which can affect earnings, the balance sheet, shareholders' equity and financial communications.
This training course will help to remove areas of uncertainty and reinforce the accounting security of the treatments applied.

Teaching and assessment methods

Before : self-assessment quiz

During the session: : technical developments accompanied by illustrations drawn from real-life situations. Numerous case studies (including accounting diagrams) and interactive quizzes help to validate knowledge acquisition.

Afterwards : documentation.
The trainer is available to answer any questions relating to the training.

General training | FinHarmony Conseil & Formation

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Price

1295 € EXCL. TAX

Testimonials

Jonathan C.
Company
Training

Generalist trainings