FX Policy Mandate

A company’s FX Policy Mandate is the document that sets out the rules, limits and procedures of the FX policy guidelines defined at management level. These regulate the principal aspects…

FX Policy Template

An FX Policy Template is a set of pre-defined protocols that guide a company to establish an effective hedging program or method of minimising the potential impact of adverse exchange…

FX rate alerts

FX rate alerts – also known as Forex alerts or exchange rate alerts – are messages that are triggered when a specific exchange rate level has been hit. FX alerts are…

FX Transaction Costs

In corporate accounting, “FX transaction costs” or “foreign exchange transaction costs” are terms referring to the expenses incurred by selling and purchasing foreign currencies from a foreign exchange dealer. In the…

Hedge accounting

Hedge accounting is an accounting method that allows companies to modify the standard basis for recognising gains and losses on hedging instruments and the exposure they are intended to hedge,…

Hedge effectiveness

Hedge effectiveness defines how efficiently a company or investor’s hedging instrument protects the fair value of a specific asset or liability. In other words, the effectiveness of the hedge relationship means…

Hedge effectiveness ratio

Hedge effectiveness ratio is a corporate accounting concept that defines the degree of efficacy of a risk hedging instrument in protecting to the fair value of the cash…

Hedge effectiveness testing

Measuring hedge accounting is one of the requirements of the IFRS 9 standards for the recognition of financial instruments. Companies applying hedge accounting are required to evaluate the performance…

Hedge Ratio

Hedge ratio is an accounting concept that defines the relation of value between a financial position, asset or liability and the hedging instrument meant to protect it against financial risk. For…

Hedge Relationship

The hedge relationship is an accounting concept introduced by the hedge accounting standards and refers to the correlation between a company’s asset or liability and the financial derivative used…

Hedged item

Hedged item is an accounting concept used in the IAS 39 and IFRS 9 accounting standards for recognition and measurement of financial instruments, that define the requirements of hedge…

Hedging instrument

Hedging instrument is a general term that refers to all the financial instruments used by investors aiming to offset the potential changes in the fair value or cash flows of…

Hedging Strategy

A hedging strategy is a set of measures designed to minimise the risk of adverse movements in the value of assets or liabilities. Hedging strategies usually involve taking an offsetting…

Hidden FX exposure

Hidden FX exposure or Hidden FX risk is a corporate treasury concept to define the potential danger for international businesses originated by the exposure to the exchange rate…

Hidden FX risk

The concept of hidden FX risks or hidden FX exposure refers to the problems of international businesses to appropriately and timely identify the scope of their foreign currency exposure,…