Many corporate hedge programs are focused on delivering dollar-for-dollar offsets against changes in FX Gain/Loss arising from the re-measurement of non-functional currency monetary assets and/or liabilities. Companies are typically rewarded for reducing volatility in earnings driven by Other Income and Expense. While perfect offset is a noble hedge objective, it is not achievable. Substantial offset, however, is achievable, and understanding and communicating why it is not perfect is the difference between excellent hedge management and the “whack a mole” run around.

This course unravels the mystery of why a hedged FX gain or loss line is not zero, and why management should expect there to be noise even for “perfect” hedges. We’ll provide actionable insights to improve the results of your hedge program, including:

  • How to identify sources of FX gains and losses in a balance sheet
  • Performance reporting
  • Preventative measures and trading tactics
Learning Objectives
  • Identify and quantify valid sources of FX gains/losses in a balance sheet hedge program
  • Recognize common accounting errors that can create artificial gains/losses or transfer gains/losses around the income statement
  • Recognize performance reporting approaches for balance sheet hedge programs
  • Identify operational and trading tactics that can help tighten up hedge results 

 

 

 

Last updated/reviewed: August 17, 2023
31 Reviews (153 ratings)

Reviews

2
Anonymous Author
This is definitely not an introductory course. The instructor assumes that the student understands general FX terminology. While the course was structured in an easy to follow format, the context was difficult to follow given my lack of knowledge in this area. I have no idea what I learned in the last hour of taking this course!
4
Member's Profile
Pretty good high-level overview for trying to decipher G/L on the FX line. Not many CPEs out there that cover this topic. Would love to see a more in-depth version that goes deeper on how to analysis this for a large multi-national corporation with multiple affiliates and exposures.
3
Member's Profile
The 'mystery' angle was a nice way to add colour to a fairly dry subject. Explanations on Timing and Forward Points which are relatively straight forward could have been clearer. The slide on Special Hedge Accounting was incomprehensible - maybe one for Treasury officials only?!
4
Anonymous Author
This course was rated "advance", and it definitely is. A general working knowledge is not sufficient. I had to go back several times to understand the points. The final exam was difficult - had to re-do it.
4
Anonymous Author
Good examples on what generates FX gains and losses. Some of the concepts, such as forward to forward and spot to spot could have been explained in a clearer, easier to understand way.
5
Member's Profile
Very well presented with thorough coverage on an important topic. Only drawback was background noise resulting from speaker bumping into microphone.
5
Anonymous Author
Really good presentation on a complex subject. Great examples to help clarify each section. More time allotted would be even more helpful.
3
Member's Profile
This class is NOT for the faint of heart. The class assumes you have a lot of experience with hedging and other FX transactions.
3
Anonymous Author
Required some knowledge of FX as prerequisite. More definition of terms would have been helpful up front in the class.
5
Anonymous Author
Very interesting approach to learning about items that impact the FX gain/loss line item. Concise and easy to follow.
4
Member's Profile
Course provides a simplified view of some complex topics which is god, but does make assumptions of knowledge base.
4
Member's Profile
Interesting and well structured. It would probably be good to go through it twice to fully understand FX issues.
3
Anonymous Author
This is a basic course re FX Gain/Loss which is good for Accountants with little exposure to the topic.
5
Anonymous Author
Nice pace of speaker, excellent re-invoice and CM example. A little tapping noise on the desk. Thanks
5
Member's Profile
Great to look back on FX. Haven't had to do that in a while, but have had a lot of it in the past!
5
Anonymous Author
A very informative introduction to understanding and identifying sources of FX gains and losses.
4
Anonymous Author
Great lesson although may only be useful if your company is using mutli-currencies.
4
Member's Profile
good overview and documentation of potential sources. good control advice as well.
4
Member's Profile
Nice overview of tracking down the potential exposures on the Gain and Loss line.
5
Anonymous Author
grate course. The column charts might be a bit more clear if they were not 3D.
5
Anonymous Author
difficult course if you don't have a solid fx base but worthwhile
5
Anonymous Author
This was a very detailed and in depth analysis of FX (gain)loss.
4
Member's Profile
Good course, covers all the basics with simple examples
3
Member's Profile
The audio on this training was not the best.
4
Anonymous Author
Good insights on a fairly complicated topic.
5
Member's Profile
Great course! Very informative.
4
Anonymous Author
Good coverage of the topic.
4
Anonymous Author
interesting material
5
Member's Profile
Very Informative
4
Member's Profile
Good
3
Anonymous Author
!
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Prerequisites
Course Complexity: Advanced

Prerequisite: Previous experience in corporate finance and a basic understanding of a balance sheet FX hedge program will provide useful context.

 

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
INTRODUCTION AND OVERVIEW
  1:42PREVIEW: Introduction to FX Gain or Loss Line
The Mystery of FX Gain or Loss Line
  The Scene of The Crime12:13
  Measuring the Derivative Clues 23:18
  The Complete Police Report5:34
Conclusion
  Crime Prevention Tactics8:12
SUPPORTING MATERIALS
  Slides: Unraveling the Mystery of FX Gain or Loss LinePDF
  Unraveling the Mystery of FX Gain or Loss Line Glossary/IndexPDF
REVIEW & TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam