Hedge Accounting for FX Forward - Group Ledger IFRS

The Hedge Management and Hedge Accounting process helps you to mitigate profit and loss volatility from the use of derivatives.

Currently, the scope item supports IFRS 9 and covers Cash Flow Hedge using FX Forwards (including NDF) as Hedging Instruments.

The functionality helps you to automate labor-intensive processes, such as calculating net open exposure amount, creating hedging relationship for hedge item and hedge instrument, determining the key figures calculation (NPV, Forward, CCBS, CVA/DVA), performing the valuation of FX transaction, checking classification, dealing with the dedesignation, and generating posting journal reports.

Key Process Steps Covered

  • Define hedging area based on hedging policy
  • Enrich, upload and release forecast and planning data
  • Determine net open exposure and make hedging decision
  • Execute FX transactions
  • Prepare and release designation
  • Determine NPV, execute valuation and classification at period end
  • De-designation and reclassification at contract close
  • Postings

Benefits

  • Provide an overview of net open exposure amount
  • Support the management of hedge accounting
  • Reduce manual operation, such as hedge relationship mapping, designation, and classification
  • Make better operational and strategic decisions using the comprehensive reporting and analysis tools