Hedge Accounting: Introduction to Hedge Accounting

Entities are exposed to many risks, but luckily, financial risks can be mitigated using financial instruments called derivatives. Such risks include interest rate risk, foreign currency risk, and price (or market) risk. But there's one small catch! Derivative instruments can create volatility in earnings because these instruments are normally recorded at fair value, with changes in fair value recorded through the income statement in accordance with ASC 815. However, the underlying hedged item is accounted for using other standards, creating a mismatch. Enter hedge accounting! Upon meeting strict criteria, hedge accounting may be used to reduce this income statement volatility. So why doesn't everyone do it? Because it's complex! In this Introduction to Hedge Accounting CPE-eligible eLearning course (1.0 CPE), you walk through hedge accounting under U.S. GAAP in a way that is easily understood.

Topics covered in this introduction to hedge accounting course include:

• Introduction to hedging risks and the various accounting implications
• Various hedging strategies under ASC 815
• Presentation and disclosure requirements

Looking for information beyond just an introduction to hedge accounting? Make sure to check out our full series on derivatives and hedging under ASC 815, linked below. 

Interested in a group discount for your team? Contact us to learn more.

 By the end of this course, you should be able to: 

• Define economic hedging and hedge accounting 
• Distinguish between the different types of hedging strategies 
• Recall the accounting for qualifying hedges