Hedging made simple.
Hedge accounting should streamline risk management—not slow it down. HedgeStar transforms complex hedging challenges into clear, actionable solutions. Our team of CPAs and quantitative experts produces audit-ready reports that adhere to ASC 815, IFRS 9, and other critical standards—keeping your focus on strategy and performance.
With more than 20 years of experience, our process is designed to deliver precision without unnecessary complexity. We guide you from strategy to execution with a clear roadmap:
Define Your Risk Objectives:
Start by clarifying your hedging strategy and pinpointing risk management goals. This foundation ensures the right approach from the beginning.
Prepare Clear Documentation:
We produce detailed hedge designation memoranda that formally link hedging instruments with their corresponding exposures, meeting all regulatory requirements.
Test for Effectiveness:
Whether using regression analysis or the dollar-offset method, our tailored testing confirms that your hedge relationship performs as expected.
Record and Report:
Accurate journal entries and supporting calculations capture your hedge results, ensuring that financial statements reflect true performance while your team focuses on broader strategy.
We create rigorous documentation that formally ties hedging instruments to the exposures they protect, meeting standards like ASC 815 and IFRS 9.
Our analysts conduct both prospective and retrospective tests using methods such as regression analysis and the dollar-offset technique. This approach confirms that your hedges effectively reduce volatility.
We translate complex technical details into clear narratives for auditors, boards, and analysts—ensuring that all stakeholders understand your hedge accounting process.
Precise journal entries and detailed calculations are produced to capture hedge outcomes in your financial statements accurately.
Our experts identify potential compliance issues and documentation gaps, recommending process improvements that align your program with strategic objectives.
By modeling different market conditions, we show you how various hedging strategies can impact your financial results—supporting informed decision-making.
Our hedge accounting expertise supports a wide range of organizations in navigating financial reporting complexities.
Financial Institutions
Banks and credit unions rely on our detailed, timely solutions to manage interest rate risk and meet regulatory standards.
Corporations
Whether managing FX exposures or hedging interest rate risk, corporate treasury teams find our services indispensable for accurate, strategic hedge accounting.
Audit Firms
Independent, SOC 1-certified support from our experts enhances audit processes and strengthens third-party valuations.
Tax-Exempt Entities
Universities, healthcare organizations, and similar entities benefit from our tailored hedge accounting solutions that align with GASB standards.
HedgeStar stands out as the partner who brings technical rigor and practical insight to every engagement. We understand the pressures of month-end and quarter-end reporting and consistently deliver solutions that meet deadlines without sacrificing precision.
Our expertise adheres all relevant frameworks, ensuring your hedge accounting practices meet regulatory standards, including:
Find answers to common questions about hedge accounting, including documentation requirements, effectiveness testing, and qualifying criteria under ASC 815 and IFRS 9.
Companies use hedge accounting to reduce earnings volatility and better align the accounting impact of derivatives with the risks being hedged. Under ASC 815 and IFRS 9, hedge accounting can help organizations better reflect their risk management strategy in financial reporting.
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Yes. Many organizations keep hedge execution with their existing banking partners while outsourcing hedge accounting, effectiveness testing, valuations, and reporting support to an independent provider. This approach allows companies to maintain control over execution while leveraging specialized accounting expertise.
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Yes. Hedge accounting services often include journal entries, valuation support, hedge accounting disclosures, and audit-ready reporting documentation. These services help organizations streamline quarter-end and year-end reporting while supporting compliance with ASC 815 and other applicable accounting standards.
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A hedge designation memorandum is a formal document required under ASC 815 and IFRS 9 that establishes and documents a hedge relationship at inception. It outlines the hedged exposure, hedging instrument, risk management objective, and methodology used to assess hedge effectiveness.
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Yes. Organizations can transition hedge accounting responsibilities to an outsourced provider mid-year. The process typically includes reviewing existing documentation, hedge effectiveness testing, journal entries, and reporting workflows to help maintain continuity and compliance.
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Prospective hedge effectiveness testing evaluates whether a hedge is expected to remain effective going forward, while retrospective testing evaluates how effective the hedge was during the completed reporting period. Both are used to support hedge accounting compliance under ASC 815 and IFRS 9.
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Yes. Hedge accounting providers frequently work directly with external auditors, internal accounting teams, and treasury personnel during the reporting and audit process. Support may include providing hedge documentation, valuation support, effectiveness testing results, journal entries, and audit-ready reporting materials.
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If a hedge fails effectiveness testing, the hedge relationship may no longer qualify for hedge accounting treatment under ASC 815 or IFRS 9. Depending on the situation, changes in the derivative’s fair value may need to be recognized directly in earnings rather than deferred through other comprehensive income.
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Hedge accounting need not be a headache. With HedgeStar, experience technically robust, audit-ready solutions that free your team to focus on what matters most: strategic growth.
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