EuroFrance San Fran 2018

March 14-15, 2018

San Francisco, CA, USA: Join Chatham in San Francisco for EuroFinance’s Managing Rapid International Growth conference. Chatham will be exhibiting.

Windy City Summit

May 22-24, 2018

Chicago, IL, USA: Chatham’s John Kane will be co-speaking with McCormick on “Foreign Exchange Exposure Management Requires the Right Analytics” on Wednesday, May 23 at 8:30am. Chatham’s Aaron Jacob will be co-speaking with Royal Caribbean Cruise Lines on “Seize the Opportunity: New Hedge Accounting Rules” on Thursday, May 24 at 11:20am. Chatham will also be exhibiting.

Cost of Funds Pressure

 

December 2017

 

Financial institutions have had success in keeping their cost of funds in check even after the Federal Reserve has raised short-term interest rates over the past few years. However, many financial institutions continue to use the same deposit betas in their interest rate risk modelling and financial forecasts that they utilized prior to the Federal Reserve rate hikes. The fact that these deposit betas have not been realized has been a large benefit to the financial institutions’ bottom lines.

 
 
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Optimize Your Balance Sheet

 

September 2017

 

The FASB’s Accounting Standards Update (ASU) on derivatives and hedging provides much anticipated improvements to the hedge accounting framework in ASC 815. Financial institutions and other users of hedge accounting will benefit from the changes in the ASU. The effective date for public business entities will be fiscal years beginning after December 15, 2018 with early adoption permitted upon issuance of the final ASU (including interim adoption). Chatham Financial has followed this project very closely over the past several years and has had a significant role in working with the FASB to help shape the new guidance. Chatham can help identify the potential impact the new guidance may have on your hedging program.

 
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Only One in Five Financial Risk Professionals Fully Comprehend FASB’s Hedge Accounting Updates

August 28, 2017 (Kennett Square, PA, USA) – Today, the Financial Accounting Standards Board (FASB) issued guidance on hedge accounting that will better align accounting with the economics of strategies used by companies. The guidance is also expected to ease administrative burdens related to applying hedge accounting so more entities can take advantage of the benefits. However, a recent survey from Chatham Financial has found that only 18 percent of financial risk professionals consider themselves well-versed in what the new standard entails, indicating that most companies have yet to discover the significant benefits awaiting them in the new guidance as well as the attendant challenges of interpreting and implementing a complex accounting topic.

Chatham Financial, the global leader in financial risk management, surveyed over 500 financial risk professionals who attended an August 24th webcast on the new guidance. Featuring experts from EY, GE, Comerica Bank, and FASB itself, the discussion focused on how the new guidance is expected to be utilized by companies in their financial risk management and accounting practices.

The final standard, which is available for immediate adoption, is designed to better align hedge accounting with the underlying economics. Hedge accounting is an elective accounting method that reduces volatility compared to mark to market accounting. By aligning economics and accounting, FASB hopes that more companies will choose to apply hedge accounting to their risk management activities.

“This has been the culmination of a 10-year project. Between our rigorous planning and evaluation, and helpful comments from end-users, we’ve created a solid set of standards that will create opportunities for companies’ hedging programs,” said Jeff Gabello, supervising project manager at FASB.

When asked what provisions of the guidance would have the biggest impact on their operations, Chatham Financial’s survey found that 71 percent of risk professionals believe that the new standards’ enhancements to fair value hedge accounting or no longer needing to separately measure and present ineffectiveness will have the greatest impact.

“Under the new standards, companies should be able to manage most risk on their balance sheets without accounting being an impediment or a challenge,” explained Muneera Carr, chief accounting officer and controller at Comerica Bank. “Beyond that, the new guidance is easier to understand and is more reflective of the economics of a transaction. It should also ease many of the administrative burdens from previous iterations.”

While there are many benefits to adopting the new standards, only 11 percent of respondents plan to early adopt the guidance. Those who choose not to early adopt will have until January 1, 2019 to implement the changes.

Respondents noted that their biggest concern regarding the new guidance is finding time to explore and adopt the new standards while juggling other initiatives. Becoming fully informed of how the changes will impact their hedging programs and making the necessary systems and/or process changes were also ranked as concerns.

“Despite the clear benefits, we’re not surprised to see that people are hesitant to early adopt the new standard,” said Aaron Cowan, executive director of corporates accounting advisory at Chatham Financial. “No one wants to be the ‘guinea pig,’ as we figure out the interpretive issues in the new guidance. Derivatives are an inherently complex topic, and with all the changes and improvements there are still many areas, some of which are newly created with these updates, that require careful judgment. That being said, for some companies the benefits of leveraging the advantageous provisions of the new guidance will outweigh those challenges. That’s why you’ll still see some companies early adopt.”

Chatham serves over 500 hedge accounting clients annually providing strategic and project advisory, full service outsourcing, and SaaS technology solutions. The hedge accounting practice is comprised of expert accountants, many with FASB and audit firm experience. The Chatham accounting advisory practice specializes in effectively applying the nuanced, highly technical interpretations of US GAAP and IFRS accounting standards to reduce financial reporting volatility for financial institutions, public and private corporations, and institutional real estate and private equity investors.

About Chatham Financial

Chatham Financial is the largest, independent financial risk management advisory and technology firm solving common yet complex capital markets and treasury challenges. Founded in 1991, Chatham serves over 2,500 companies annually to mitigate financial risks associated with interest rate, foreign currency, and commodity exposures. Their team of over 500 debt and derivatives professionals, CPAs, analysts and technology developers work through over $500 billion in annual notional transaction volume. Learn more at www.chathamfinancial.com

Contact

Kelly Whalen
On behalf of Chatham Financial
212.279.3115 x133
kwhalen@prosek.com

2017 FMS East Coast Regional Conference

September 17-19, 2017

Bethesda, MD, USA: Join Chatham Financial for the 2017 FMS East Coast Regional Conference at the Hyatt Regency Bethesda, Bethesda, MD.

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NY Bankers Association Financial Services Forum

November 8-11, 2017

Palm Beach, FL, USA: Join Chatham Financial for the NY Bankers Association Financial Services Forum at the Breakers Resort, Palm Beach, FL.

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PICPA FI Conference

September 25, 2017

Harrisburg, PA, USA: Join Chatham Financial at the PICPA FI Conference held at the Best Western Premier the Central Hotel & Conference Center, Harrisburg, PA. Todd Cuppia and Eri Panoti will present the speaking session, “The Impact on Financial Institutions from FASB’s Targeted Improvements to Accounting for Hedging Activities.”

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NJ Bankers Senior Management Conference

September 13-15, 2017

Atlantic Ciy, NJ, USA: Chatham Financial is attending the NJ Bankers Senior Management Conference at the Borgata Hotel & Casino, Atlantic City, NJ.

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NAREIT SFO Workshop 2017

September 18-19, 2017

Boston, MA, USA: Chatham Financial is sponsoring the NAREIT SFO Workshop at the Fairmont Copley Plaza, Boston, MA. This event is invite only.

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