Hedge Accounting for FX Swap - Group Ledger IFRS
This 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, and using FX Swap as to transfer hedging instruments from the original exposure period to a new exposure period if an overhedge situation occurs in the original exposure period.
Key Process Steps Covered
- Execute original situation for FX forwards or non-deliverable forwards
- Define hedging area based on hedging policy
- Enrich, upload, and release forecast and planning data
- Determine net open exposure and make hedging decision
- Execute over-hedge situation for FX swaps
- Prepare and release designation
- Determine NPV, execute valuation, and classification at period end
- Process reclassification for hedging relationship at balance sheet recognition date
- Process dedesignation at maturity date
- Reclassify hedging reserve and cost of hedging reserve at exposure subitem end date
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