FASB update removes roadblock to hedging with derivatives
Financial Institutions | Kennett Square, PA
SummaryA lot has changed since the mid-1980s, when derivatives were known as “off-balance sheet” instruments because there was not a neat way to fit them onto a firm’s financial statements.
Complex hedge accounting rules are high on the list of reasons that community banks have chosen to avoid derivatives as risk management tools. But the Financial Accounting Standards Board (FASB) created a stir a little over a year ago, when it promised to improve accounting for hedging activities. That stir turned into a wave of fanfare from community banks in August 2017, when the final Accounting Standards Update (ASU 2017-12) was issued for ASC 815 - Derivatives and Hedging, the standard formerly known as FAS 133. In order to appreciate the excitement surrounding the new hedging guidance from FASB, it helps to take a quick look at the history behind the accounting standard that is widely considered to be the most complex the accounting organization has ever issued.
Are you ready to learn more?
Contact us to speak with a Chatham advisor.
Our featured insights
Eri Panoti details how the FASB's recent rule proposal would benefit financial institutions
Eri Panoti spoke to Bloomberg Tax about how the FASB's new rule proposal could make financial institutions' interest rate risk management easier by expanding common accounting techniques that qualify for hedge accounting.
Solutions that grow with your institution
As your financial institution grows, either organically or through acquisition, new challenges emerge. As the largest independent hedging advisory firm with decades of experience, partnering with Chatham Financial ensures your institution's healthy and continuous growth.
Chatham Financial wins Hedging Adviser of the Year at the Risk Awards
On November 26, Chatham Financial accepted the inaugural Hedging Adviser of the Year award at the 2020 Risk Awards. This new award recognizes excellence in providing independent advice to derivatives users.
Hedge accounting advisory for financial institutions
Hedge accounting can be challenging to “get right” and tough to apply, so designing an effective hedging strategy and achieving the intended results is important for financial institutions.
Hedge accounting considerations for loan deferrals
Learn about the hedge accounting considerations and impacts for loan deferrals as it relates to the COVID-19 pandemic.
ASU 2020-04: Reference Rate Reform
Highlights and analysis of the ASU 2020-04, Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.
Chatham crowned Risk Management Advisory Firm of the Year
JCRA, now part of Chatham Financial, the independent financial risk management advisory, is delighted to announce that it has been recognised as Risk Management Advisory Firm of the Year at the GlobalCapital Global Derivatives Awards 2019.