Hedging made simple.
HedgeStar provides full a range of services to companies that elect to utilize the hedging provisions of ASC 815 to record their derivative transactions. Services provided to our clients include: preparation of hedge documentation, mathematical testing of initial effectiveness, periodic evaluations of on-going effectiveness, preparation of journal entries to be used to record the derivative in the client’s financial records, and assistance with footnote disclosures in annual financial statements.
ASC 815 Accounting for Derivative Instruments and Hedging Activities is a comprehensive accounting standard that was originally issued in 2001 and provides entities with guidelines and requirements for measuring hedge effectiveness for derivative instruments. Generally, if a derivative is a hedge, the gains and losses associated with periodic changes in value will flow through other comprehensive income rather than be recognized in earnings immediately. ASC 815 is not mandatory; it is elected by the company if the company decides to classify its derivatives as hedges.