A strong hedge accounting program can reduce or eliminate earnings volatility
Investors who wish to avoid surprise risks or auditor scrutiny can depend on Chatham’s expertise in hedge accounting. Whether you have SEC filing obligations, need to provide transparency to investors, or wish to establish a consistent earnings track record, we can successfully navigate the complexities of ASC 815 or IAS 39, which are so critical. By timing the earnings recognition of the derivative with that of the hedged asset, liability, or forecasted transaction, we can significantly reduce or eliminate the earnings volatility that would otherwise be recognized in financial statements.
Hedge Accounting solutions for private equity sponsors and their portfolio companies
Chatham’s comprehensive hedge accounting solutions are customized for each client to reduce complexity and administrative burdens. We provide technical consulting, analysis, technology, education, and key hedge-accounting deliverables on multiple fronts.
- Align economic hedging and favorable hedge accounting with long-term objectives: Chatham can structure a transaction and interpret the nuances of hedge accounting standards to optimize accounting results. This also helps minimize potential volatility on term loans, due to events like IPOs or re-financings.
- Efficient delivery of hedge accounting results: Chatham supports all aspects of compliance- hedging policies, hedge designation memos, valuations, journal entries, effectiveness tests, disclosures, and related reports.
- Robust derivative valuations: Chatham calculates derivative valuations using methods similar to those of sophisticated global financial institutions to satisfy the requirements provided in ASC 820 and IFRS 13.
- Education and support: Chatham’s expert hedge accounting team supports key stakeholders, from educating senior management on the impact of hedge accounting to answering questions raised by auditors or regulators.
- Comprehensive program: We properly apply our expertise in global hedge accounting standards and provide the processes and solutions that instill peace of mind.
Why portfolio companies work with Chatham.
Chatham delivers fully customized solutions to meet the specific hedge accounting needs of each company. Typically this is arranged in a fully-scoped retainer agreement. Solutions range from fully outsourced engagements, whereby the Chatham team performs the required hedge accounting work, or technology-based solutions delivered on the ChathamDirect platform.
Many clients with in-house experience in the arduous process of hedge fund accounting look to Chatham as a trusted hedge accounting alternative. We are ready to serve companies of all sizes, easing the burdens and hassles of providing accurate, quality reporting.