IFRS Overview for Derivatives and Hedging

This comprehensive two-day course provides an in-depth review of the current IFRS accounting and reporting requirements for derivatives and hedging. 

The IASB published the final version of IFRS 9 Financial Instruments in July 2014, incorporating the new chapter on general hedge accounting which was first published in November 2013. IFRS 9 will replace IAS 39 for annual periods beginning on or after 1 January 2018. The IASB also has a separate project on macro hedging and a Discussion Paper was published in April 2014. These changes will have a significant impact on financial and non-financial organizations and will make hedge accounting more widely available. It will be important for entities to understand these changes.  

The requirements for derivatives and hedging are explained in clear, simple language and illustrated with corporate annual reports and other real-world examples. Valuations, hedge documentation processes, effectiveness testing, and journal entry outcomes are explained and illustrated by the specialist instructor. Delegates are also invited to bring along their own examples to discuss during the course. 

This program answers questions such as:

• What are the requirements for hedge accounting?
• How does classification of financial instruments affect the decision to use hedge accounting?
• What is fair value?
• What are the hedge accounting documentation requirements?
• How is hedge effectiveness designed and tested?
• How can hedge engineering work to achieve better results?
• How are embedded derivatives identified and accounted for?
• What are the principal similarities and differences between US GAAP and IFRSs in the area of derivatives and hedge accounting?

Course benefits:  

• Understand the reasons why companies hedge 
• Construct a successful hedge and use hedge engineering to achieve better results 
• Measure hedge effectiveness and ineffectiveness 
• Identify and account for the following hedges: fair value hedges, cash flow hedges, net investment hedges and portfolio hedges of interest rate risk (macro hedges) 
• Identify and analyze ‘hidden’ derivatives 
• Determine the appropriate treatment of embedded derivatives under IAS 39 and IFRS 9 
• Discuss the latest developments and emerging accounting issues 

Prerequisites:  A basic understanding of IFRS (or US GAAP) accounting and reporting principles for corporate entities. No advance preparation is required for this course.

Who Should Attend

• This course is primarily designed for those who use derivatives and hedge accounting under IFRS in their company or are considering doing so in the future:
• Accountants in an investment bank or treasury operation/internal audit in a bank
• Individuals working in non-banking entities where they are considering hedge accounting for the first time
• Industry controllers, internal and external auditors, analysts and other finance and risk professionals who are interested in learning about derivatives and hedge accounting

Topics:

• IFRS 9 Financial Instruments
• Derivatives
• Embedded Derivatives
• Hedging
• Hedge accounting (IAS 39)
• IFRS 9 Hedge Accounting
• Presentation and Disclosures (IFRS 7)
• Updates