Corporate treasurers have long complained about the restrictiveness of FAS 133: If they want to qualify for hedge accounting treatment and avoid hedge volatility making a mess of their earnings, they are limited to vanilla products used in a textbook way. Often that's all a treasurer wants to do-but in some cases these simple hedges aren't ideal, creating demand for more flexible products, which still qualify for hedge accounting. Aiming to meet this demand, big derivatives dealers have lured away FAS 133 experts from the big public accounting firms to structure and vet new solutions-but their efforts have had mixed success.

"By and large, most people are sticking pretty closely to vanilla instruments if they want to get hedge accounting," says Helen Kane, founder and president of Cupertino, Calif.-based hedging adviser Hedge Trackers "The only cases I have seen where a company was using anything other than plain vanilla instruments and was taking hedge accounting are those where a bank has told them it was okay."

A treasury official at a large U.S. corporate says that his preferred dealer has an edge over its competition by virtue of being able to provide products that give the company a bit more freedom to hedge. He wouldn't give any details-and the bank in question wouldn't comment either, on or off the record.