Hedge accounting as confidence measure in Central and South America

September 25, 2015

From recent news in Central and South America:

 

"In response to Itau’s claims, CSN said its debts in USD are ‘totally protected’ against currency fluctuations. CSN said that it adopts measures such as having cash in USD at both CSN and Namisa, as well as hedge accounting."

 

We’re seeing more statements like this from large publicly-traded enterprises in Central and South America. These companies cite hedge accounting as proof that they have their risks hedged and under control. Cemex in Mexico, Ecopetrol in Colombia, and Petrobras in Brazil are recent examples.

 

Why is this important for DerivActiv and our solution partners in the region? Three reasons:

· Raises awareness of hedge accounting in national markets
· Establishes hedge accounting as the “gold standard” of safely hedging risk
· Creates investor-driven demand for hedge accounting as a corporate best practice

 

BRAZIL FACTOID:
CPC 38 is the Brazilian GAAP hedge accounting standard.
CPC 38 was harmonized with IAS 39 in 2010. Efforts are underway to harmonize it with IFRS 9.

 

 

 

 

 

 

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