Hedge accounting

Hedge accounting

Support in comprehensive implementation of hedge accounting; review with recommendations.

Support in comprehensive implementation of hedge accounting; review with recommendations.

Hedge accounting can help in solving many accounting problems relating to accounting treatment of hedged item and hedging instrument. Despite it is not very complicated, implementation of hedge accounting requires additional analyses and preparation of hedge accounting documentation as well as effectiveness testing.

Why hedge accounting

Hedge accounting is an accounting treatment, under which you can properly reflect applied hedging strategy in the books. The economic hedge often results in accounting mismatch that can be eliminated after the hedge accounting criteria are met. There is no compulsion for hedge accounting, and therefore its use is subject to the fulfillment of the relevant conditions. By hedge accounting implementation you can first align the moment of the hedged item’s and the hedging instrument’s impact on the income statement and thereby eliminate or significantly reduce the volatility of the profit and loss, as well as in specific cases to adjust the initial value of non-financial assets by the realized result on the hedging instrument or to move the result on the hedging instrument from the financial result to the operating result.

 

KPMG’s support

As part of the services relating to hedge accounting KPMG offers its customers a wide range of services:

  • Training and/or workshops on the principles of hedge accounting in general or tailored to the needs of our customers
  • Reviews of prepared by the customers documentation and effectiveness tests with recommendations
  • Comprehensive implementation of hedge accounting including a feasibility study (analysis of the possibility of different types of hedge accounting implementation) and the preparation of the report from the review and complete set of documentation including the effectiveness tests, accounting schemes and disclosures to financial statement.

All works are performed depending on demand, in accordance with the Accounting Act, together with the relevant regulations of the Ministry of Finance, or in accordance with International Financial Reporting Standards.

 

Why KPMG?

  • KPMG was the advisor of the largest banks in Poland in the implementation of hedge accounting, including the most advanced, and of many companies in the non-financial sector.
  • Our consultants have a wide practical knowledge resulting from conducted projects and meetings with clients from different sectors.
  • KPMG supports the use of each possible type of hedge accounting in accordance with accounting standards.
  • KPMG’s approach adapts to the needs of each client.

 

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