Simplifying the complexity of hedge accounting with the Last of Layer Method
May 23, 2019 2:00 pm - 3:00 pm CST
Starting in 2019, the Financial Accounting Standards Board ‘s (FASB) is simplifying the hedge accounting process under ASC 815. The changes emanate from Accounting Standards Update (ASU) 2017-12, which goes into effect for public entities for fiscal year-end reporting periods beginning after December 15, 2018. The goal of this amendent was to ease the application of hedge accounting in certain situations, and to allow greater transparency and understanding of hedging results. The last-of-layer method is a new approach under fair value hedge accounting that can be used to maximize hedge effectiveness and mitigate market risk for hedges of prepayable fixed rate assets. All depository and lending institutions should be aware of the new guidance and its benefits for managing risk across the balance sheet. In this session we will discuss 1,2, and 3.
What is the Last of Layer Method?
Defining your hedging relationship
Documenting and assessing hedge effectiveness
Advanced Preparation: None
Field of Study: Accounting
CPE Credit(s): 1
Delivery Method: Group Live
Tim Potter, CPA
Senior Manager| HedgeStar
Tim Potter is the Senior Manager of the Hedge Accounting Group and is responsible for coordinating and overseeing the delivery of all hedge accounting related deliverables. Mr. Potter is a GASB 53 and GASB 72 specialist adept at developing efficient hedge testing protocols and accounting for complex hedge relationships that have hedging instruments with multiple hedged risk components. He presents at various industry conferences and webinars and is a highly effective consultant for services related to GASB 53 and GASB 72.
In his current role, Tim is responsible for providing hedge accounting services, establishing best practices and internal controls, and serving as an accounting subject matter expert. Tim’s professional experience includes positions with top companies in the financial services sector such as PricewaterhouseCoopers, TCF Bank, and Pine River Capital Management.