Enhanced management reporting for hedge accounting
SummaryCommunicate your hedge accounting program clearly and concisely to stakeholders.
Many treasury professionals face the challenge of capturing and quantifying their financial risk management program’s results so they can clearly communicate them to the senior leadership team, other business units, and the board of directors. With Chatham’s new Enhanced Management Reporting solution, you can provide a concise, compelling overview of the economic and accounting implications of your financial risk management program. The highlighted dashboards below illustrate how you can streamline the reporting processes while improving communication with stakeholders.
With the new Portfolio Overview dashboard, you can view changes in portfolio values from a variety of angles. Views include valuations by counterparty, currency, and changes in value over time. You can also filter by relative dates (i.e., next seven days, last 30 days, etc.), which automatically flow through to all aspects of the dashboard.
Because you can quickly view your portfolio’s mark-to-market changes over a specific timeframe, the Portfolio Overview dashboard in our Enhanced Management Reporting module provides you with a simple way to present the volatility experienced in the portfolio over a given period of time. With this detail, you can quantify the benefit of applying hedge accounting to mitigate the volatility present in your portfolio.
FX trading summary
The FX Trading Summary view provides you with insights into your FX portfolio from an operational perspective. Features of this view include the ability to see the number of active trades and associated notional balances. Additionally, you can drill into the desktop visuals to view an underlying trade listing.
Disclosures associated with hedge accounting require you to pull a variety of data points surrounding your organization’s hedging portfolio that are outside of typical day-to-day concerns. This often leads to scrambling for high-level program details to meet quarter-end filing deadlines. Filtering your portfolios by relative dates and currency provides a simple way to support disclosures, such as the number and notional balance of trades by program. Your team will save time and can focus on more complex areas of your quarterly close. You can also leverage these views as a quick population check when reviewing quarterly activity and verifying for completeness.
The Enhanced Management Reporting module also includes a dashboard specifically designed to review trade maturities. You can adjust trade populations through relative date filtering and display information such as trade count, notional balance, and current valuations.
To maintain your designation status for cash flow hedge accounting, your accounting team must monitor the requirement to assert probability over the transactions being hedged. You can use the Maturing Trades Dashboard to quickly isolate trades by maturity date to track this requirement. This dashboard helps you understand the exposures required during a specific time frame and can map to your company’s current forecast. You can then leverage this comparison to support the probability assertion required to maintain hedge accounting.
ChathamDirect is a groundbreaking financial risk management and hedge accounting platform that supports foreign exchange, interest rate, and commodity hedging programs. ChathamDirect provides a clear view of your entire hedging program, including cash flow forecasts, balance sheet exposures, and hedge requests — all securely available on a leading SaaS platform. ChathamDirect is backed by Chatham Financial, an employee-owned, independent market leader with a global team of capital markets experts, risk management advisors, CPAs, lawyers, quantitative analysts, and technology developers who serve more than 3,000 clients annually.
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Chatham Hedging Advisors, LLC (CHA) is a subsidiary of Chatham Financial Corp. and provides hedge advisory, accounting and execution services related to swap transactions in the United States. CHA is registered with the Commodity Futures Trading Commission (CFTC) as a commodity trading advisor and is a member of the National Futures Association (NFA); however, neither the CFTC nor the NFA have passed upon the merits of participating in any advisory services offered by CHA. For further information, please visit chathamfinancial.com/legal-notices.
Transactions in over-the-counter derivatives (or “swaps”) have significant risks, including, but not limited to, substantial risk of loss. You should consult your own business, legal, tax and accounting advisers with respect to proposed swap transaction and you should refrain from entering into any swap transaction unless you have fully understood the terms and risks of the transaction, including the extent of your potential risk of loss. This material has been prepared by a sales or trading employee or agent of Chatham Hedging Advisors and could be deemed a solicitation for entering into a derivatives transaction. This material is not a research report prepared by Chatham Hedging Advisors. If you are not an experienced user of the derivatives markets, capable of making independent trading decisions, then you should not rely solely on this communication in making trading decisions. All rights reserved.20-0365
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