Course description
Derivatives Accounting IFRS9
This programme will give you a deep understanding of derivatives accounting and the application of hedge accounting for the interest rate, inflation and FX markets. Learning is based on intense use of real cases, applying IFRS9 step-by-step. The new requirements are contrasted with IAS 39 where needed, with detailed discussions on the implementation of new rules.
Case studies and workshops simulate real-life client discussions and cover the decision-making, documentation requirements, hedge effectiveness assessment, and the accounting entries of a hedging strategy during its life.
All participants will receive a copy of Juan Ramirez's book "Accounting for Derivatives: Advanced Hedging under IFRS", published by Wiley Finance.
Upcoming start dates
Suitability - Who should attend?
This Accounting for Derivatives course has been developed for professionals with financial reporting responsibilities, including:
- Derivatives structurers and salespeople
- Derivatives accountants
- Financial managers
- Treasurers
- Derivatives middle-office
- Stock analysts
Outcome / Qualification etc.
This Accounting for Derivatives course is eligible for CE/CPD credit hours from CFA and GARP Institutes.
Training Course Content
Day One
Accounting for FX derivatives - Conceptual Framework
- Introduction to IFRS 9
- Interaction with other IFRS standards
Introduction to FX transactions
- Types of FX exposures
- Functional currency vs. presentation currency
- Chronology of a FX transaction
Workshop: Philips - Hedging a highly expected foreign sale
- Identification of the FX exposure
- Applying hedge accounting - hedging with an FX forward
- Applying hedge accounting - hedging with an option
- Applying hedge accounting - hedging with a tunnel
- Applying hedge accounting - hedging with a knock-in forward
Case Study: Hedging a highly expected foreign purchase
- Identification of the FX exposure
- Applying hedge accounting - hedging with an FX forward
Case Study: Net investment hedge – France Telecom and Everything Everywhere
- Translation of foreign operations
- Identification of the FX exposure
- Applying hedge accounting - hedging with a cross-currency swap
- Applying hedge accounting - hedging with foreign debt
Short case studies: Special FX situations
- Intercompany FX hedging hedge accounting challenges
- Dual hedging using a single derivative
Day Two
Accounting for Interest Rate Derivatives
Workshop: Hedging a floating rate liability – Cash flow hedge
- Financial assets classification under IFRS 9. Comparison to IAS 39
- Financial liabilities classification and the fair value option
- Accounting for floating rate bonds – the effective interest rate
- Applying cash flow hedge for a fixed to floating interest rate swap
- Hedge accounting documentation and hedge effectiveness assessments
- Accounting entries
Workshop: Hedging a future issuance of a fixed rate liability
- Case background and hedging strategy
- Hedge accounting documentation and hedge effectiveness assessments
- Accounting entries
Workshop: Hedging a fixed rate liability
- Accounting for fixed rate bonds
- Applying fair value hedge for a floating to fixed interest rate swap
- Hedge accounting documentation and hedge effectiveness assessments
- Accounting entries
Case study: Hedging inflation risk
- IAS 39 vs. IFRS 9 guidelines on inflation risk hedging
- The challenge of hedging inflation-linked revenues
Case study: Macrohedging (under IAS 39)
- Explanation of the objectives
- Steps to its application and its weaknesses under IAS 39
- IFRS 9 macrohedging project
Other topics
- Hedging credit risk
- Hybrid instruments
Course delivery details
Courses are delivered in the London classroom and live online via LFS Live in London, New York, and Singapore time zones.
Please contact LFS for more details.
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Exclusive Teaching for Capital Markets Professionals in Europe, Americas and Asia Pacific
London Financial Studies are specialists in delivering professional development for finance professionals focusing on capital markets. LFS provide individuals, teams and companies with expert teaching that combines theoretical understanding with practical experience, giving them the knowledge to operate at the...
Great course for those used to and focused on Hedging matters. Juan Ramirez is a great teacher and knows the topic very well, which is reflected in the quality of the training m...