Accounting for Derivatives and Hedging Activities

CPE Credits:

Program Level:

Overview

Prerequisites:

None

Learning Objective: Using case studies, this workshop will provide participants with practical skills to learn the requirements and successfully implement the FASB pronouncement for derivatives and hedging activities.

Learn the definition of a derivative and how to identify derivatives
Understand embedded derivatives and related accounting issues
Learn how to account for fair value, cash flow and foreign exchange hedging activities
Know how to document hedging activities

Know how to assess effectiveness of hedging activities
Understand disclosure requirements and related issues in Forms 10-K and 10-Q
Work a series of case studies for each area

Date	City	Register
Apr 30 - May 1, 2012	Las Vegas, NV	Register
May 3 - 4, 2012	Chicago, IL	Register

Agenda

Day 1
8:30 - 9:00 a.m.	Registration/Continental Breakfast
9:00 - 9:10 a.m.	Introduction and Overview of the Course Big picture and schedule for the day Preview the major issues with which you will grapple Objectives of the guidance Key risks and pitfalls Fundamental assumptions of the pronouncement Fair value treatment Hedge criteria – why are they fairly limiting? Rationale for these fundamental assumptions Controversy and history Derivative accounting issues Examples (forward contract and interest rate swap) GAAP for derivatives Hedge accounting Current GAAP for hedging activities Fair Value hedge accounting in income treatment Other comprehensive income treatment for cash flow hedge SEC comment areas Revisions from the DIG
10:30 -11:30 a.m.	A Quantitative Derivative and Hedging Example
11:30 - Noon	SFAS 133 Definition of a Derivative Instrument Underlyings Notional amount Initial net investment Minimal amount Net settlement – a key element of the definition When is settlement net? When is net settlement possible? Embedded derivatives Determining appropriate accounting for embedded derivatives When to separate The Fair Value Option Which instruments are not derivatives? "Normal purchases and sales" and other items excluded from the definition Examples
Noon -1:00 p.m.	Luncheon
1:00 - 1:30 p.m.	Definition of a Derivative Instrument, case study and conclusion
1:30 - 2:00 p.m.	Accounting Principles for Derivative Instruments Fair Value Basis for Fair Value Accounting Measurement of unrealized gains and losses Accounting treatment of unrealized gains and losses Current income Hedging activities Other comprehensive income treatment in specific cases for cash flow hedg
2:00 - 5:00 p.m.	Hedging Fair Value Definitions Documentation requirements Documentation in risk management policy Importance of assessing effectiveness Details of criteria to be met to qualify for hedge accounting Hedged item, derivative, nature of hedged risk How to assess effectiveness Examples Quantitative tools required Impact on reported earnings and volatility What if anything can be done? Guidance from the FASB The Derivative Implementation Group Impact of the FASB's exposure draft for hedge accounting Definition Example hedging transaction, strategy and implementation Accounting Current earnings for derivative and hedged item Examples and case studies
5:00 - 6:30 p.m.	Cocktail Party for Participants and their Guests

Day 2
8:30 - 9:00 a.m.	Continental Breakfast
8:30 - Noon	Cash Flow Hedges in Detail Definition Example hedging transaction, strategy and implementation Accounting Comprehensive income treatment Examples and case studies
Noon -1:00 p.m.	Luncheon
1:00 - 3:30 p.m.	Foreign Currency Hedges Definition How FX hedges are really just Fair Value and Cash Flow hedges Hedging foreign currency assets and liabilities Intercompany transactions that can be hedged Example of a hedging transaction, strategy and implementation Accounting Examples and case study
3:30 - 4:00 p.m.	Disclosures Gathering information for disclosure requirements Accounting system impact Relationship to risk management strategy
4:00 - 4:30 p.m.	The FASB and IASB's plan to Modify Hedge Accounting, Questions and Answers, Concluding Issues

Date	City	Register
Apr 30 - May 1, 2012	Las Vegas, NV	Register
May 3 - 4, 2012	Chicago, IL	Register

Share This Course

Year after year, an excellent program. I expect to attend this program every year until I retire!

Pamela B. Bruno Vice President, Controller & CAO BNP Residential Properties, Inc. Charlotte, NC

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