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Case Study

Hedge accounting implementation leads to an automated solution


When facing increasing shifts in the manufacturing sector, new senior leadership of a Fortune 100 company proposed the application of hedge accounting. The firm was faced with integrating and automating an accounting program to support the high volume of trades and meet its complex needs in managing foreign exchange risk as well as commodity risk.

Company goals

  • Quickly implement hedge accounting programs for the firm’s FX and commodities exposures.
  • Integrate systems utilized for mark-to-market and cash flow trades with an automated technology solution to bring in transactions and value them in accordance with accounting standards.
  • Align procurement, treasury, and accounting teams to comprehensively hedge existing exposures.
  • Retain accounting expertise and maintain a continued advisory partnership to handle the complexity of the firm’s program and exposures.

Key activities

  • Operationalizing a hedge accounting program: The organization worked with Chatham to kickstart, streamline, and maintain a program with exposures across asset classes quickly and efficiently.
  • Align with various stakeholders: Dozens of stakeholders across the procurement, treasury, and accounting teams partnered with Chatham’s hedging, hedge accounting, and technology subject matter experts to drive cohesive, company-wide results.
  • Support changing reporting and hedging needs: The Chatham hedge accounting team adapted to the shifting needs of a global company operating in a volatile economic environment while providing both GAAP and IFRS support.
  • Automate trades through ChathamDirect: The treasury team integrated the ChathamDirect platform with its systems for mark-to-market trades, creating a seamless user interface for the firm.

Key Results

  • Reduced P&L impact and protected earnings through implementing hedge accounting programs across a variety of asset classes.
  • Improved cost efficiency while reducing key-person risk through automating manual treasury and accounting processes.
  • Increased controls and collaborated with auditors to reduce risk of error from period-end processes.

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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