Foreign Exchange Cash Flow Hedge Effectiveness Testing Now Available
The FX market reached $53 trillion in June 2010 and remains one of the most commonly used derivatives by corporate treasuries to hedge their risk. Fair Value Insight, a joint offering from FINCAD, the industry standard for financial analytics and ICAP, the world’s premier interdealer broker and provider of post trade services, now offers corporate treasuries the ability to comply with hedge accounting rules under FAS 133 and IAS 39/IFRS 9 regulations for FX instruments.
The new functionality in Fair Value Insight provides the necessary test results required under hedge accounting rules. Users will save significant time with automation thereby helping to reduce potential human errors experienced using a more manual process. Various other hedge types will be added in the near future.
“We know hedge accounting is important for the corporate market, but doing it right can be time intensive and prone to errors when using spreadsheets,” said Gurpreet Banwait, Sr. Product Manager, Web Systems, FINCAD. “With the addition of this functionality to Fair Value Insight, corporations can satisfy hedge accounting regulations in less time and at a much lower cost than using consultants or other systems in the marketplace.”
Fair Value Insight is an online system from the valuation and risk experts at FINCAD. It provides coverage for the most commonly used instruments, such as FX forwards and interest rate swaps and a robust credit adjustment process. Since the risk and valuation system includes all the necessary data, it saves users significant time while dramatically reducing errors. Fair Value Insight is a software-as-a-service solution that requires no software or hardware installation and is accessible through a web browser from virtually anywhere.
