While the Financial Accounting Standards Board's recent proposalon accounting for financial instruments has irked the bankingindustry by extending fair-value accounting to loans, another partof the draft could ease the chore of accounting for hedges forother companies.
“There are some elements that will make hedging a little biteasier,” says Tom Omberg, the Deloitte & Touche partner wholeads the firm's financial accounting and reporting servicesoffering.
Under FAS 133, Omberg explains, companies that didn't use theshort-cut or match-terms methods to establish the effectiveness ofa hedge had to perform a quantitative assessment of a hedge'seffectiveness.
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Susan Kelly
Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.
