Distance learning Currency hedging

Prerequisites

No prior knowledge required

Objectives

◗ Demystifying the terminology related to foreign exchange risk.

◗ Learn the basics of the instruments used in foreign exchange hedging and the hedging strategies implemented by companies.

◗ Analyze the impact of hedge accounting on the financial statements.

Training program

◗ Mastering currency hedging instruments

– Principles of the main hedging derivatives: FX forward, FX swap, option
– Foreign exchange hedging terminology: carry, swap points, intrinsic value, and time value…
– The economic rationale behind hedging
✔ UNDERSTAND | Illustration: spot/forward/option comparison
✔ APPLY | Practical exercise: Calculate the forward rate based on interest rates and the spot rate
✔ EVALUATE | Quiz on how the main foreign exchange hedging instruments work

◗ Understanding IFRS accounting treatments

– The two main types of hedge accounting: fair value hedge (FVH) and cash flow hedge (CFH)
– Conditions that must be met to apply hedge accounting
– Key considerations: documentation and effectiveness
✔ UNDERSTAND | Summarize and compare the CFH, FVH, and NIH accounting models
✔ APPLY | Practical exercise: Apply CFH to hedge an import or export transaction
✔ EVALUATE | Quiz: Which type of hedge accounting should be used?

◗ The challenges of currency hedging within a group

– Net Investment Hedge (NIH)
– Hedging of Transactions Eliminated on Consolidation: Impacts and Challenges
✔ UNDERSTAND | Illustration: Net Investment Hedge for a Foreign Subsidiary
✔ EVALUATE | Quiz on Intercompany Hedges

Why choose this course?

Most companies hedge against foreign exchange risk related to their operational transactions (purchases and sales in foreign currencies). There is often a lack of understanding of how the instruments used actually work.

This short, interactive training course aims to demystify the terminology used and provide a simple explanation of how the instruments used for foreign exchange hedging in businesses work.

Teaching and assessment methods

Distance learning :

– Three visual elements: a video of the presenter, the presentation, and a virtual whiteboard

– Interactive quizzes

– Maximum of 6 participants

Before: self-assessment quiz

During the session: an overview of key principles, a discussion of practical implications, and examples drawn from recent financial statements. Practical exercises and interactive quizzes help ensure that participants have acquired the necessary knowledge.

Afterward: supplementary materials. The facilitator will be available after the training session to answer any questions related to the training.

Price

740 € EXCL. TAX

Testimonials

Distance learning currency hedging