 |
Corporate governance for treasurers - Article
There has been a major focus on corporate governance by governments and regulators around the world over the last few years. These have concentrated on trying to rebuild confidence in the markets after some high profile scandals and to reduce the existence of money laundering. Although these have led to some well-publicised legislation, treasurers also need to demonstrate good corporate governan... |
| |
 read
now > |
|
|
Corporate governance - international developements - Article
This article looks at the three main international developments affecting corporate governance within multinational corporate treasuries today - the introduction of International Accounting Standards, the Sarbanes-Oxley Act and Basel 2. In each case, we describe the implications of the change before identifying the key risks treasurers need to manage.... |
| |
read
now > |
|
|
Compliance with corporate governance regulations - Article
The corporate governance agenda offers opportunities for treasurers to restructure their operations. There will be a cost to this, so the challenge is to incorporate compliance into regular daily activities as much as possible. Treasurers need to identify what they want to achieve from compliance and communicate that to the treasury department, the board and their investors.... |
| |
read
now > |
|
|
Update on IAS 39 - Article
The adoption of IAS/IFRS has created a significant amount of work for all companies required to comply with the EU regulation. One of the biggest problems for accountants, finance departments and treasurers has been the continued uncertainty over the specific requirements of the standards, specifically the controversial IAS 39 Financial Instruments: Recognition and Measurement. This article look... |
| |
read
now > |
|
|
Hedge effectiveness under IAS 39 - Article
Any company wanting to adopt hedge accounting under IAS 39 will need to demonstrate how it expects every documented hedge to be effective and to demonstrate that each one has been effective at every balance sheet date. This article examines the requirements for hedge effectiveness testing under IAS 39 and identifies the most common effectiveness testing methods. The choice of testing method is i... |
| |
read
now > |
|
|
Managing exotic FX risk - Article
Over recent years, multinational companies have diverted production facilities to lower wage economies and have sought to expand into emerging markets. As a result, treasurers have been asked to manage the foreign exchange risk in emerging markets which has arisen. This article identifies some of the difficulties associated with managing transaction risk in emerging markets. It then outlines th... |
| |
read
now > |
|
|
An introduction to translation risk - Article
Changes in the exchange rate between the currency in which a company reports and those in which the company’s assets and liabilities are denominated, can have a significant impact on a company’s balance sheet. The risk of this impact is known as ‘translation risk’. It is not an indication of performance failure (at company-wide or individual subsidiary level), but a potential effect of exchange ... |
| |
read
now > |
|
|
Reporting - Article
This article looks at how translation risk is reported in financial accounts and explains the methods used in balance sheet and profit and loss account translation.... |
| |
read
now > |
|
|
Using hedging instruments - Article
If you hedge a FX risk exposure, you are trying to establish a second currency position to offset what is lost or gained on the original exposure. The difficulty with hedging a translation risk exposure is that translation risk does not result in cash gains or losses, whereas most hedging transactions do. In this article, we look at the use of hedging instruments, explaining what you need to con... |
| |
read
now > |
|
|
Accounting treatments for hedges - Article
We examine how accounting standards, particularly IAS 39, affect how hedged translation risk exposures are reported.... |
| |
read
now > |
|
|
IAS 21 - Article
We take a closer look at IAS 21 and the accounting treatment and translation methods this standard prescribes for the translation of financial statements denominated in a foreign currency.... |
| |
read
now > |
|
|
FX risk management in an M&A environment - Article
For multinational treasurers, managing foreign exchange exposures on a daily basis is an important role in itself. However in an acquisitive environment, the role can take on a different complexion. Treasurers will be required to evaluate any risk associated with making a foreign acquisition, to manage the purchase payments and then to quickly understand the impact of the acquisition on the newl... |
| |
read
now > |
|
|
Valuation of financial instruments - Article
As financial markets become more complex, corporates are increasingly using derivative financial instruments such as forward forwards, futures, options and swaps. These can help to manage financial risks originating in the volatility of foreign exchange rates, interest rates or commodity prices. However, the use of these instruments has added a new dimension of financial risk for companies and t... |
| |
read
now > |
|
|
Conducting a systems audit - Article
As the role of technology in treasury continues to expand, it is essential to ensure that the systems you have in place are functioning correctly and that the risk of fraud or error is kept to a minimum. We discuss the sort of risks that auditors look for and the advances in auditing technology that are shaping the way that data are monitored. ... |
| |
read
now > |
|
|
Interest rate risk measurement - Article
The management of interest rate risk is an important part of corporate risk management. The active management of interest rate exposure minimises the risk of incurring losses and opportunity costs from movements in interest rates. In the first of four articles on interest rate risk management, we define interest rate risk and focus on the methods of measuring interest rate risk exposure.... |
| |
read
now > |
|
|
Managing interest rate risk with swaps - Article
There are several different methods of measuring interest rate exposure. Companies can decide how to manage the risks involved by identifying and measuring the effect that interest rate changes can have on a company’s assets and liabilities. There are many interest rate risk management strategies and tools available to the Treasurer. This month we focus on the use of interest rate swaps.... |
| |
read
now > |
|
|
Managing interest rate risk with options - Article
Having focused previously on how swaps can be used to manage interest rate risk exposures, this month we look at the use of interest rate options. Interest rate options are an additional tool which can be used to hedge the exposure of current and future borrowing requirements against changes in interest rates. Options allow companies to limit their exposure to higher interest rates, without rest... |
| |
read
now > |
|
|
Enterprise Risk Management - Article
Enterprise Risk Management (ERM) has received increasing attention in recent years. ERM provides a framework to standardise and integrate risk management across an organisation by identifying, measuring and managing the risks to which a company as a whole is exposed.... |
| |
read
now > |
|
|
Risk Management - Article
In the first of three articles on foreign exchange risk, we outline the different types of FX risk exposure faced by companies and discuss how these exposures can be avoided or reduced through internal business practices.... |
| |
read
now > |
|
|
A guide to FX transactions - Article
Our series of articles on foreign exchange risk management continues with a look at external hedging techniques and the benefits and disadvantages of individual hedging instruments such as forwards, futures, options and money market hedges.... |
| |
read
now > |
|
|
Managing FX risk in restricted markets - Article
In the third article in our series on FX risk we look at the management of transaction exposures in markets that are restricted by capital controls. The limited convertibility of currency and restricted availability of hedging instruments in these markets may make traditional risk management techniques ineffective. However, other instruments such as non-deliverable forwards and non-deliverable o... |
| |
read
now > |
|
|
Political risk management - Article
Businesses that expand globally in search of new markets, resources, lower production costs and other opportunities face growing complexity in terms of the business practices and additional risks resulting from new political and economic environments. The management of such risks can ensure that investments in new markets and established operations abroad are sufficiently protected. A comprehens... |
| |
read
now > |
|
|
Corporate governance codes - Article
Corporate governance gained prominence following the large scale accounting scandals in the US and Europe in the early 2000s. While US legislators chose to regulate some corporate governance issues by adopting the Sarbanes-Oxley Act, European states tend to rely on voluntary codes of conduct for the improvement of corporate governance standards. In this article we examine the themes expressed in... |
| |
read
now > |
|
|
Corporate governance – internal control - Article
Internal corporate governance control became an important issue in the wake of major accounting scandals in both the US and Europe. While the US has taken steps to regulate the internal control systems of public companies with Section 404 of Sarbanes-Oxley’s to enhance the accuracy and transparency of financial reporting, the European Union and its member states have taken a more market-regulated... |
| |
read
now > |
|
|
Corporate governance reporting - Article
The EU Company Reporting Directive has introduced new rules requiring companies whose securities trade on a regulated market to produce a discrete corporate governance statement in their annual reports or as a separate report. In this article we examine the requirements of the reporting directive and the way in which other relevant information should be disclosed when reporting on corporate gover... |
| |
read
now > |
|
|
Amendments to IAS 39 - Article
IAS 39 has long been criticised, particularly by banks, for its complexity and the potential consequences of mark-to-market measurement of financial instruments. The financial crisis has sparked renewed controversy over the effects of fair value accounting on banks’ balance sheets, regulatory capital and ability to lend in a deteriorating market environment. In response to political demands, the... |
| |
read
now > |
|
|
Managing commodity price risk - Article
Commodity price volatility has had a significant impact on the performance of many businesses in recent months. In this article we look at how the factors driving commodity prices can be assessed. We also consider general strategies which can be used to structure commodity price management activities and manage commodity price risk exposure.
... |
| |
read
now > |
|
|
Revisiting risk - Article
When times are tough, treasurers need to ensure that they have all bases covered, particularly where risk is concerned. In this article we provide an overview of the main types of risk that a treasurer is likely to encounter in day-to-day operations. We look at traditional business risks such as financial and operational risk, together with more contemporary and perhaps less obvious threats such... |
| |
read
now > |
|
|
No risk; no technology - Article
From the discovery of fire to automated back-office, investment and trading programmes, new technology has brought benefits – and risks. Mitigating them is part science, part art… and often a bit of luck. In this article we present an overview of technological risk and take a view from an industry professional as how best to mitigate it.... |
| |
read
now > |
|
|
Inflation hedging - Article
While inflation risk may not be a top concern today, inflation is widely expected to rise when economic recovery arrives. We explore the two types of instrument most commonly used to hedge inflation risk: inflation-linked bonds and inflation-linked swaps. We also provide an overview of the key players in the inflation product market.... |
| |
read
now > |
|