CPE: 8 hours
Category: Accounting & Auditing
Prerequisites: General knowledge of foreign currency denominated transactions and hedging strategies.
Advanced prep: None
Who should attend: CPAs responsible for preparing GAAP financial statements with foreign transactions represented, as well as those who audit, review or compile financial statements with entities that engage in foreign operations, sales or purchases.
As more companies enter the global marketplace, CPAs must be prepared to address the risks associated with transactions denominated in a foreign currency. Stay ahead of the curve by understanding and managing the risks resulting from foreign exchange gains and losses.
We'll explore foreign currency risk with export sales; the balance sheet impact from the valuation of assets and liabilities at spot rates; and the use of derivative contracts such as forwards, options and swaps to hedge foreign denominated transaction risks. We'll also review strategies to improve certainty with cash flows when transactions are represented in foreign currency; accounting issues of qualified and non-qualified hedging strategies; and U.S. GAAP's specific requirements and their potential impact on financial statements.
Note: SEC reporting requirements and public company audit requirements will not be covered.
- Identify the nature of foreign transactions and the resulting risks of foreign currency exposures and changes in exchange rates.
- Determine hedging strategies for foreign transactions, including the use of forward contracts, options and swaps.
- Recognize accounting impacts of foreign transactions and the accounting requirements relating to the use of derivatives.
- Identify insights for the timely planning of hedging strategies.
- U.S. GAAP standards impacting foreign transactions
- Hedging mechanics relating to foreign denominated transactions