Hedge Accounting for Financial Institutions

Financial institutions that use derivatives to manage risk or offer derivatives to their clients are mindful of the associated regulatory and financial reporting involved. They expect reported results to accurately reflect the underlying economics of derivative and hedging activities.

Effectively aligning the bank’s economics and reported results, while minimizing ineffectiveness can be challenging, especially since ASC 815 is nuanced and difficult to apply properly. It is critical for companies to successfully navigate these accounting complexities in order to avoid earnings surprises as well as scrutiny from external investors, auditors, and regulators.

Benefits of Chatham’s Hedge Accounting Solutions

Chatham has the expertise to help you navigate the complexities of ASC 815. We have assisted hundreds of companies with tens of thousands of such transactions. Our hedge accounting solutions are customized to your needs and reduce the administrative burden of applying ASC 815 with technical accounting consulting, analysis, technology, education and key hedge accounting deliverables.

Our deep expertise in economic hedging and hedge accounting enables us to design hedging transactions that optimize accounting results.

  • Hedge accounting results, delivered: We provide everything needed for you to comply with hedge accounting requirements, including hedging policies, hedge designation memos, valuations, journal entries, effectiveness tests, disclosures, and related reports.
  • Robust derivative valuations: To satisfy ASC 820 requirements, Chatham provides derivative valuations that use the same assumptions and methodologies as the most sophisticated global financial institutions.
  • Education and expert support: Our team of hedge accounting experts provides support to key stakeholders. For example, we will educate senior management on the impact of hedge accounting; we also help your team answer questions raised by auditors and regulators.

How you can work with Chatham

We partner with your treasury, accounting, lending, and executive teams to create a customized balance sheet risk management program as well as develop your derivative product offering to borrowers. Chatham’s accounting advisory team offers comprehensive accounting support for both balance sheet solutions and customer-level derivative programs.

To learn more about Chatham’s Hedge Accounting solutions, please contact us today.