On November 9th HedgeStar’s Craig Haymaker and Merc Morse presented Trends in the Interest Rate Environment and New Accounting Standards Update for ASC 815 (ASU 2017-12) to the MN Association for Financial Professionals (AFP). Haymaker and Morse discussed recent trends in the interest rate environment, and the impact on interest-related valuations observed in the post-election era. Hedgers of rates are now able to account for those strategies through ASU 2017-12 – Published 8/28/17 – which further aligns accounting results with "economics" for the benefit of greater earn sling stability. New concepts have been introduced to hedge accounting requirements, which are expected to allow more and more companies to apply hedge accounting to their risk management strategies.
“The introduction of the new Accounting Standards Update makes it more likely for entities to qualify for preferential accounting treatment through hedge accounting,” explains Haymaker. “We highly encourage the early adoption of the rules so that entities can start taking credit for their risk management activities.”