Course 1208: IFRS Overview for Derivatives and Hedging (2 days)

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1 Course introduction This comprehensive two-day course provides an in-depth review of the current IFRS accounting and reporting requirements for derivatives and hedging. The IASB published the final version of IFRS 9 Financial Instruments in July 2014, incorporating the new chapter on general hedge accounting which was first published in November IFRS 9 will replace IAS 39 for annual periods beginning on or after 1 January The IASB also has a separate project on macro hedging and a Discussion Paper was published in April These changes will have a significant impact on financial and non-financial organizations and will make hedge accounting more widely available. It will be important for entities to understand these changes. The requirements for derivatives and hedging are explained in clear, simple language and illustrated with corporate annual reports and other real-world examples. Valuations, hedge documentation processes, effectiveness testing, and journal entry outcomes are explained and illustrated by the specialist instructor. This program answers questions such as: What are the current and future requirements for hedge accounting? How does classification of financial instruments affect the decision to use hedge accounting? What is fair value? What are the hedge accounting documentation requirements? How is hedge effectiveness designed and tested? How can hedge engineering work to achieve better results? How are embedded derivatives identified and accounted for? What are the principal similarities and differences between US GAAP and IFRSs in the area of derivatives and hedge accounting? Topics Financial Instruments Classification and measurement Printed from on 21 Jun 2016 Page 1 of 5

2 Effective interest method Derivatives Analysis and examples of common derivatives (including options, interest rate swaps, currency swaps, forwards and futures) Cash flows Variations of standard derivative contracts Techniques for measuring fair values Accounting for derivatives (IAS 39 and IFRS 9) Embedded Derivatives Analysis and examples of embedded derivatives in debt host contracts, equity host contracts, and purchase/sale contracts Accounting for embedded derivatives Determining the separation conditions under IAS 39 Allocating the initial carrying amount to embedded derivatives that are separated under IAS 39 Determining how embedded derivatives affect the cash flow characteristics test under IFRS 9 Hedging Analysis and examples of common hedging relationships Hedged items Hedging instruments Definition and mechanics of fair value, cash flow and net investment hedges Examples (commodity contracts, interest rate and forex risk exposures) Hedge accounting (IAS 39) Hedge documentation Measuring and testing hedge effectiveness Measuring and accounting for hedge ineffectiveness Discontinuation of hedge accounting Presentation and Disclosures (IFRS 7) IFRS 9 New hedge accounting framework Alignment with risk management policies Hedged items Hedging instruments Effectiveness assessment and rebalancing Recording hedge effectiveness Printed from on 21 Jun 2016 Page 2 of 5

3 Group and net positions Transitional issues and disclosures Macro hedge accounting April 2014 Discussion Paper Teaching method Live group instruction, cases, examples, group work, open discussions Descriptions and explanations of accounting principles Analysis and mechanics of common derivative products and hedging relationships Practical illustrations using model journal entries, model financial statement disclosures, case studies, and real-world examples Analysis of the impact of IFRS 9 hedge accounting Interactive participation is encouraged All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials Electronic copies of exercise and case study solutions will be available to participants Prerequisites A basic understanding of IFRS (or US GAAP) accounting and reporting principles for corporate entities. No advance preparation is required for this course. Course benefits Understand the reasons why companies hedge Construct a successful hedge and use hedge engineering to achieve better results Measure hedge effectiveness and ineffectiveness Identify and account for the following hedges: fair value hedges, cash flow hedges, net investment hedges and portfolio hedges of interest rate risk (macro hedges) Identify and analyze embedded derivatives Determine the appropriate treatment of embedded derivatives under IAS 39 and IFRS 9 Discuss the latest developments Printed from on 21 Jun 2016 Page 3 of 5

4 Who should attend? This course is primarily designed for those who use derivatives and hedge accounting under IFRS in their company or are considering doing so in the future: Accountants in an investment bank or treasury operation/internal audit in a bank Individuals working in non-banking entities where they are considering hedge accounting for the first time Industry controllers, external auditors, analysts and other finance professionals who are interested in learning about derivatives and hedge accounting CPE / CPD Accreditation NASBA IASeminars is registered with the US National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: ICAEW Partner in Learning IASeminars is proud to have been named as an ICAEW Partner in Learning, working together to offer the ICAEW IFRS Certificate to our clients worldwide. ICAEW (The Institute of Chartered Accountants in England and Wales) is a world leading professional membership organisation that promotes, develops and supports over 145,000 chartered accountants worldwide. CPE certificates obtained from attending IASeminars courses are an ideal way for ICAEW members and others to demonstrate their continuing professional development, provided that the topic is relevant to their learning and development needs. New York State Board of Public Accountancy IASeminars is registered with the New York State Board of Public Accountancy as a CPE sponsor. Our CPE Sponsor ID is: This registration does not constitute an endorsement by the Board as to the quality of our CPE Program. Texas State Board of Public Accountancy IASeminars is registered with the Texas State Board of Public Accountancy as a CPE sponsor. Our CPE Sponsor ID is: This registration does not constitute an endorsement by the Board as to the quality of our CPE Program. Printed from on 21 Jun 2016 Page 4 of 5

5 In House To bring this course in-house please contact us and we will be pleased to assist Printed from on 21 Jun 2016 Page 5 of 5