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Fundamentals of Accounting for Derivatives

Lorman Education Services
Training overview
Professional Course
1 hour

Course description

Fundamentals of Accounting for Derivatives

Understand the basics of hedge accounting and the financial statement impacts.

How do entities manage the earnings volatility related to their hedging activities? The answer hedge accounting. This course will provide a highlevel overview of the main areas of hedge accounting. This material will discuss the benefits of hedge accounting, documentation requirements, effectiveness assessments, and hedge accounting strategies for entities seeking preferential accounting treatment.

Who should attend?

This live webinar is designed for accountants, CPAs, CEOs, presidents, vice presidents, CFOs, controllers, business owners and managers, and tax preparers.

Training content

Basics of Hedge Accounting and Description of Broader Financial Statement Impacts of Hedge Accounting

  • Hedge Accounting Concepts – Cash Flow, Fair Value, and Net Investment
  • Hedge Accounting Impacts – Affected Balance Sheet and Income Statement Accounts
  • Hedge Accounting Benefits – Earnings Stability, Enhanced Operating Margin, Key Stakeholder Optics

Documentation Required for Hedge Accounting

  • Hedge Designation Memorandum and Addendums
  • Memorandum Sections – Risk Management Objective, Description of the Hedge Relationship, Methods for Assessing Effectiveness, and Financial Statement Impacts

Effectiveness Testing

  • Testing Approaches – Hypothetical Derivative, Change in Variable Cash Flows, Fair Value
  • Statistical Assessment Methods – Regression, Stress Testing, Value-At-Risk
  • Effective and Ineffective Results

Basics of Component and Portfolio Hedging

  • Component Hedging Concepts – Financial Contracts, Non-Financial Contracts
  • Portfolio Hedging Concepts – Pools of Assets, Expected Sales, Raw Material Purchases

Certification / Credits

Credits: CPE

Learning Objectives

  • You will be able to define the basics of hedge accounting and to describe broader financial statement impacts of hedge accounting.
  • You will be able to review the documentation required for hedge accounting.
  • You will be able to review the documentation required for hedge accounting.
  • You will be able to discuss the basics of component and portfolio hedging.

About Lorman Education Services

Lorman Education Services - Live and On-Demand Courses

Lorman Education Services is a leading provider of online professional development and corporate training for organizations and individual professionals. For more than 30 years, Lorman has delivered relevant, high-quality, professional-level courses that cover a broad range of business and technical...


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Contact info

Lorman Education Services

Lorman Education Services
2510 Alpine Road
54702 Eau Claire Wisconsin

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