Hedging relationships

You can use hedging relationships to assign hedged items (securities) to hedging instruments (forward security transactions). If prerequisites (for example, documentation and the effectiveness test) are satisfied, the hedging relationship can be designated, and hedge accounting regulations can be used. As long as the hedging relationship is fulfilling the requirements for hedge accounting, the respective positive rules are used.

Positive management and accounting

You can split up a security position according to different subpositions. This enables you to differentiate between hedged portions of a security and freestanding portions.

Effectiveness test of hedging relationship

You can use the dollar-offset-method to calculate the effectiveness of a hedging relationship. The effectiveness test can also be executed from the master data of the hedging relationship.

Documentation of hedging relationship

Within hedging relationships, you can create documentation automatically or manually (upload or enter). The documentation is one of the prerequisites of the use of hedge accounting. The documents are stored with the document management service. You have a single point of entry for information gathering during audits. Documentation can be easily created by using the automatic functionality based on PDF forms.

Legacy data conversion

You can make a legacy data conversion in order to continue hedging in the new enhancement. To do this, you dedesignate all hedging relationships in the old system and transfer all hedge components to the new positions and subpositions. The key date of legacy data transfer will have to be equal for all positions and subpositions.