Hedge Accounting Basics: Fair Value, Cash Flow Hedges & Effectiveness Testing
Why hedge accounting exists, fair value hedges of fixed-rate debt, cash flow hedges with the OCI reserve and reclassification, the lower-of test, dollar-offset and regression effectiveness tests, hedge ratios and rebalancing, net investment hedges and the reserve roll-forward: 8 hands-on labs on one fictional manufacturer. General IFRS 9 / ASC 815 concepts, simplified; no affiliation with the IASB or FASB. Educational only, not accounting or investment advice.
The first lesson is free — no account needed.
About this course
A hedge accounting course that books the hedges of one fictional manufacturer, Strandvik Instruments, in a spreadsheet, for accountants, auditors, treasury staff and finance students. You show the board why a perfect economic hedge still makes profit jump without hedge accounting, book a fair value hedge of fixed-rate debt swapped to floating, follow an FX forward for a forecast EUR purchase through the OCI reserve to profit, split a commodity hedge into its effective and ineffective parts with the lower-of test, test effectiveness with the 80–125% dollar offset and a regression with SLOPE and RSQ, set and rebalance a proxy hedge ratio, offset a net investment in a subsidiary with a EUR loan, and roll the hedge reserve forward with a waterfall chart. General IFRS 9 and ASC 815 concepts with no affiliation with the IASB or FASB. Educational only, not accounting or investment advice. The first lab is free.
Lessons
- Why Hedge Accounting? Profit Volatility with and without ItFree
- Fair Value Hedge: Fixed-Rate Debt Swapped to Floating Pro
- Cash Flow Hedge: Forecast EUR Purchase, OCI Reserve & Reclassification Pro
- The Lower-of Test: Splitting the Effective and Ineffective Portion Pro
- Effectiveness Testing: Dollar-Offset 80–125% and Regression with SLOPE & RSQ Pro
- Hedge Ratio and Rebalancing: Proxy Hedging with SLOPE Pro
- Net Investment Hedge (Simplified): EUR Loan vs EUR Subsidiary Pro
- Hedge Disclosures and the OCI Reserve Roll-Forward (with Waterfall Chart) Pro