Fact Sheet

Derivative & Hedge Accounting

7

Kyriba delivers exposure management, mark-to-market and hedge accounting solutions to support corporate hedging programs and better facilitate regulatory compliance.

Kyriba’s Valuation Engine allows fast, automated valuation postings across your entire portfolio quickly to speed your financial close.

Realize Cost Savings Through Accounting Automation

With Kyriba, regulatory compliance for FASB, IAS, ASC and IFRS derivative accounting standards are no longer an issue. Kyriba offers a comprehensive Financial Risk Management solution that delivers the depth and complexity modern organizations require to effectively manage hedging programs and complying with regulatory standards.

Kyriba employs a team of hedging and derivative accounting experts so that your compliance requirements are met. The collective knowledge from our subject matter experts helps you meet regulatory standards.

Kyriba offers a complete FX Risk Management solution with market data, FX exposure aggregation, trade management, settlements, and derivative hedge accounting all seamlessly integrated with cash management, liquidity forecasting, payments, global connectivity and comprehensive reporting on a single platform. Other providers offer multiple technologies to achieve what Kyriba delivers in a single cloud portal. Kyriba’s solution simplifies the support for your hedging program, but offers premium product performance, managed upgrades and eliminates IT dependencies.

Kyriba’s in-house developed accounting engine generates structured accounting entries, full
audit trails and strengthens and automates financial reporting and controls.

Simplified Investment Processes

Kyriba offers a step-by-step workflow to define the hedge for accounting purposes, including:
• Linking Exposure and Derivative
• Type of Hedge Type
• Exposures being hedged
• Effectiveness Testing Methods
• Assessment Frequency
• Regulatory Standards

Upload Documentation

Kyriba supports the drag and drop upload of hedge documentation to increase efficiency, reduce the risk of error, and simplify audit compliance by having all hedging documentation in a central repository. This is especially useful for organizations with 10, 20 or 100-page hedging policy documents.

Valuations

Kyriba automates the mark-to-market process to calculate valuations for all derivatives. Kyriba’s valuation engine allows clients to run valuations across their entire portfolio whenever needed during the month. Valuations use market rates and curves from Kyriba’s Market Data service, while market information can also be accessed from third-party platforms. Kyriba’s audit logs and information storage offer complete transparency to the valuation process.

Derivative Accounting

Kyriba developed a powerful accounting engine embedded within our solution to generate structured accounting entries, a full audit trail and financial controls, as well as more flexibility to support local GAAP requirements without customization. If you don’t elect to pursue hedge accounting, Kyriba’s integrated accounting engine will calculate and journalize the change in fair value to your income statement accounts.

Effectiveness Testing

If you pursue hedge accounting, Kyriba supports multiple methodologies for both prospective and retrospective testing, including regression and statistical tests. Clients determine their assessment methods, tolerances, and frequencies so that Kyriba can automate the process.

Hedge Accounting

The results of effectiveness testing will determine the appropriate gains and losses to be deferred to either balance sheet accounts (e.g. OCI or CTA) and to P&L accounts. Kyriba’s accounting engine automatically creates the accounting entries with straight through process to the general ledger with the appropriate controls in place.

De-designation Events

Kyriba fully supports de-designation events, including OCI reclassification, change in accounting treatment for dual purpose hedges, and early de-designation of hedging relationships.

Kyriba Hedge Accounting Capabilities

Hedge Types
• Cash flow hedges
• Fair value hedges
• Net investment hedges

Risk Types
• Foreign exchange
• Interest rate
• Commodities

Effectiveness Testing
• Prospective and retrospective
• Critical terms match
• Shortcut
• Dollar offset
• Regression analysis

Workflow Features
• Hedge definition
• Designate risk and regulatory standard
• Uploading hedge documentation
• Hypothetical derivative (optional)
• Hedge effectiveness testing
• Mark-to-market valuation
• Automated accounting entries
• De-designation events
• OCI reclassification

Compliance
• FASB133
• IAS39
• ASC815
• IFRS 9