How can the FASB's new guidance reduce income statement volatility?
Our updated guide reflects the FASB's new hedge accounting standard
Our podcast shares key lessons learned from early adopters
Derivatives, whether freestanding or embedded in other instruments, may be used to manage exposure to certain risks or for speculative purposes. Explore PwC's latest thinking on derivatives and hedging.
Inclusion of the Secured Overnight Financing Rate (SOFR) as a benchmark interest rate,
Other issues pertaining to the replacement of LIBOR with SOFR, and
The new hedging guidance, including new guidance around excluded components, allows entities to better align their hedge accounting with their risk management activities. Specifically, the new guidance adds to the previous allowable exclusions and changes the recognition of excluded components. This video covers what components are eligible for exclusion from the assessment of effectiveness under the new hedging guidance, how to recognize such "excluded components" in the financial statements, and the the accounting treatment for excluded components upon discontinuance of a hedge.