ASU 2017-12 and IFRS 9: Shared goals, different methods
For some companies, hedge accounting is attractive in theory, but too cumbersome to execute in practice. When the IASB and FASB decided to simplify regulations, their aim was to align hedge accounting more closely with risk management and to provide more useful information about the purpose and effect of hedging instruments.
Set to take effect in 2021, the new guidelines realize these goals in different ways. U.S. GAAP aims to offer targeted improvements to address specific practice issues, and private entities are already moving to comply. IFRS 9 is broader in scope and has greater potential impacts, so companies are taking more time for careful evaluation.
Whatever phase of the hedge accounting compliance process you are in, KPMG can act as your trusted advisor, offering guidance and insight along with technical expertise and proprietary tools created specifically for hedging. And our global reach means we're constantly following new developments in every region.
New opportunities for businesses, better reporting for investors
The new standards deliver clear benefits. For businesses, the time, effort and expense required to apply hedge accounting will be reduced, and new options for hedging will be more accessible. At the same time, investors will receive more accurate and timely financial reporting.
Unmatched experience in accounting and risk management
Whether you're familiar with hedge accounting or are considering it for the first time, KPMG's unmatched experience and global network of specialists can help you go beyond compliance to achieve real value. Our Accounting Advisory Services and Risk Analytics specialists work together to tailor our support to meet the individual needs of each client, across every region. Our approach includes key phases and deliverables including:
Gain a clear understanding of new U.S. and international standards, how they differ, and the implementation schedules for each one.
KPMG can help:
Design a response that defines and documents your hedge accounting policy and aligns it with risk management objectives.
Complete and test design prototype, and put new processes and systems into operation.
KPMG can help
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates.