New Accounting Guidance Won’t Always Be Easy

July 6, 2017 Chatham Financial

iTreasurer Logo

“Almost every piece of corporate debt that gets negotiated today has a floor in it, and a lot of them are at 0%,” Mr. Gentzel said. “However, companies often enter into swaps with no floor to hedge debt that does have a floor, and that creates a mismatch. That’s ineffectiveness.” However, most companies don’t want to buy 0% floors in their swaps because it won’t provide them with any real protection in today’s rising rate environment.
Previous Resource
Debt Valuations in Accordance with ASC 820
Debt Valuations in Accordance with ASC 820

With the introduction of ASC 820 (FAS 157), fair values in general have received increased attention. Howev...

Next Resource
Optimize Your Balance Sheet Under the New Hedge Accounting Guidelines
Optimize Your Balance Sheet Under the New Hedge Accounting Guidelines

The FASB’s Accounting Standards Update (ASU) on derivatives and hedging provides much anticipated improveme...