Companies selling or purchasing abroad with invoices denominated in foreign currency are exposed to foreign currency risk and thus foreign exchange risk.

This course begins with an explanation of the various types of risk and the foreign currency hedging activities available to mitigate or eliminate foreign currency risk.

Enrollees learn about multiple types of hedging instruments and gain an understanding for how to aggregate exposures into meaningful categories. Hedging examples are discussed to provide a better understanding of how to apply each instrument. The course concludes with a review of FASB’s ASC 815 requirements for Derivatives and Hedging.

Learning Objectives
  • Define the steps for effective hedging of foreign currency exposures.
  • Describe the characteristics of foreign currency hedging instruments and how they can be applied.
  • Explain the market conventions for quoting currency rates and calculate the base currency given the foreign currency exposure.
  • Illustrate how to aggregate exposures (including outstanding hedges) to provide a net currency position and hedge ratio.
  • Apply examples of hedging scenarios with various risk management objectives to illustrate the use and benefit of each hedging instrument.
  • Explain hedge accounting requirements under FASB ASC 815.
Last updated/reviewed: August 4, 2023
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23 Reviews (82 ratings)

Reviews

4
Member's Profile
A very thorough overview of hedging. The complex nature of the material was offset by the instructors slow and methodical delivery. However, the written documentation (including the exam) conflicted occasionally with the spoken instruction, leading to a bit of confusion. In particular, one slide relating to an example of hedging with options referred to a loss calculation which was actually a gain, and in the exam, a double negative should have been a single negative.
3
Anonymous Author
Good discussion of the various hedging strategies. Some of the concepts are difficult to understand and could benefit from more explanations. It would also help if all of the calculations of how the amounts are arrived at are shown in the slides. Some of the calculations are missing, leaving the audience wondering how the numbers are derived.
5
Member's Profile
Even though I have an extensive background in FX exposure management, this course provides an excellent sanity check as to the hedging practices and the current available derivatives. One drawback is that the instructor's presentation style was somewhat robotic.
3
Member's Profile
The delivery is a bit dry which can make it difficult to stay engaged. There is a lot of coverage here and the time to review and cover examples was a bit shy for what needs to be learned.
4
Anonymous Author
Overall good. It would be nice if it wasn't basically reading from the slides. As the material got a little more complicated, there was not time to think thru the examples.
3
Member's Profile
Too much reading of slides. Review questions were good, and had useful feedback for errors, but I'd have liked more of them. Quite long for a 1-hour course.
4
Member's Profile
Mr. Bergman has a strong grasp of foreign currency and the hedge accounting. This was a good introduction. Mr. Bergman's delivery was a little dry.
5
Anonymous Author
Good presentation with relevant samples cases. A lot of information to take in. Will return to presentation and course materials for reference.
5
Member's Profile
Great course! Professor Bergman brilliantly covers the main aspects of managing foreign currency exposures in a simple and direct way.
4
Anonymous Author
Course provides good information on hedging in one of the simplest manners I have seen. The instructor is not very engaging.
3
Member's Profile
Complex Course. Lots of examples which are helpful but they are a bit complex in the time allotted
3
Anonymous Author
Good class though definitely an advanced topic for experienced Finance/Accounting personnel.
4
Anonymous Author
The presentation was a little dry - obvious that the presenter was just reading material.
5
Member's Profile
today I got a valuable information for the " Layering FX Forwards" . must be usedule
4
Anonymous Author
Decent course. Commentary beyond what is on the slides would help with engagement.
5
Member's Profile
great material. Thank you for the course. The slides and examples were very good.
5
Anonymous Author
terrific course that covered all the basics for establishing a plan to combat Fx
5
Anonymous Author
Excellent course for treasury professionals with a few years under their belt.
5
Member's Profile
The examples are very useful and apply the concepts to different scenarios.
3
Anonymous Author
Good information. The material is at the intermediate or higher level.
4
Anonymous Author
Comprehensive as to subject but delivery could have been livelier.
4
Anonymous Author
thanks...
5
Member's Profile
very good
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Prerequisites
Course Complexity: Advanced

Prerequisite: Previous experience in corporate finance

 

Advanced Preparation: None

 

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
  Course Overview CPE
Course Syllabus
Modules
  20:29PREVIEW: Introduction and Types of Hedging Instruments
  Quotations and Aggregating Exposures9:27
  Use Cases & Applied Examples19:18
  Hedge Accounting13:09
SUPPORTING MATERIALS
  Slides: Managing Foreign Currency ExposuresPDF
  Managing Foreign Currency Exposures Glossary/IndexPDF
REVIEW & TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam