Accounting for treasury hedging activities

Article Abstract:

Research into treasury hedging activities reveals that hedging is a zero-sum game: it is not provable that a consistent hedging policy is more profitable than doing nothing. However, a hedging policy can prove valuable to firms in that it provides certainty in foreign exchange and interest rates. A hedging policy can only be justified on the grounds of the certainty it brings to treasury operations. When accounting for treasury hedging activities, it is common for firms to use a revaluation approach that measures the value of transactions and matches the hedging to the period of a change in value, specifically a profit or loss. In order for the risk management function of the hedging performance to be measured, hedging must be accounted for separately, necessitating that all treasury and hedging functions be revalued.

Finance, Accounting, Hedging (Finance), Great Britain

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E-treasury evolution

Article Abstract:

E-treasury is a way of organizing treasury processes for financial executives, such that the various links to both internal corporate systems and external parties are electronically integrated, possibly but not necessarily involving the Internet. The objective is to improve the efficiency and therefore reduce the cost of treasury transactions.

United Kingdom, Other Financial Vehicles, Capital funds & cash flow, Security & commodity services, not elsewhere classified, Financial Record Keeping Services, Technology application, Financial records management, Corporate treasurers

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