US derivatives users cheer hedge accounting rejig

Rule change ends years of uncertainty and piecemeal reform

accounting-numbers
Derivatives used as hedges won't lose favourable accounting treatment if a user novates a trade to another counterparty

Market participants are cheering a fix to US accounting rules that ensures derivatives used as hedges won't lose favourable accounting treatment if a user novates a trade to another counterparty. International standard-setters have no plans to make a similar clarification, however.

The US Financial Accounting Standards Board (FASB) issued an update on the effect of derivatives contract novations on existing hedge accounting relationships on March 10. The update clarifies that a derivative owner

To continue reading...

You must be signed in to use this feature.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: