Comment: improvements to hedge accounting

In our response to the FASB’s proposed targeted improvements to the hedge accounting guidance in ASC 815, we express both our support for the Board’s efforts to help entities achieve and maintain hedge accounting for a greater number of highly effective economic hedges, and our belief that the proposed amendments not only clarify but improve the guidance in ASC 815.

However, we offer several recommendations that we believe would enhance the clarity and operability of the proposed guidance, including clarifying the following:

• The meaning of the term “hedged risk” within the context of a group of forecasted transactions;
• The particular attributes of a hedged risk and those of a forecasted transaction; and
• Whether an entity may use a qualitative method of assessing hedge effectiveness in cash flow hedges involving choose-your-rate debt instruments.

Download our letter to read our comments in full.