FASB ASU 2017-12 Deadline Draws Near

As of December 15, 2018, public companies have been required to implement updates (FASB ASU 2017-12 amendment to Topic 815) to their derivatives hedge accounting. With many companies coming up to their reporting deadline in June, there is a lot of helpful advice and clarifying documentation out there. Here are some we found especially valuable:

Fortunately, pasVal can accommodate these updates as part of it’s push-button Hedge Effectiveness Testing (HET) service. The service has always included:

  • Support for testing methods including Consistent Critical Terms, Dollar Offset, Synthetic Instrument, and Regression
  • Prospective & Retrospective testing
  • The ability to apply user-defined market scenarios

And now, per ASU 2017-12, it allows you to also:

  • Hedge only the benchmark rate component of the hedged item in a fair value hedge
  • Use partial-term hedges for a fair value hedge

The pasVal HET service is incredibly straightforward and easy to use: identify the hedged and hedging items to be tested, and pasVal will run each applicable test and deliver a detailed report including supporting calculations and itemized test results.

In addition to HET, pasVal offers a series of accounting reports to help you comply with ASC 815 (FAS133), GASB 53, and IFRS 9 (IAS 39).


About Principia Partners

Principia Partners LLC (Principia) provides solutions for derivative and structured finance operations. Global financial institutions and independent asset managers have used the award-winning Principia Structured Finance Platform since 1995 to unify investment analysis, portfolio management, risk surveillance, accounting and operational control across the breadth of structured credit assets, fixed income investments and complex derivatives. In 2015, Principia launched its Analytic Service, pasVal, to make its award-winning pricing and analytics available to an even broader range of businesses.

Principia is based in New York, with an office in London and a technology center in King of Prussia, Pennsylvania.