A derivative is a financial product whose value is based on an underlying asset, liability, or variable. Hedging is an investment strategy to protect another investment. Derivatives are popular for reducing financial risk and are common on big companies’ balance sheets. However, understanding their impact on business finances is challenging for accounting and auditing industries. This course covers the financial accounting and reporting requirements for derivatives and hedging activities, as prescribed by ASC Topic 815, with a focus on fair value, cash flow, and net investment hedges.

• identify the appropriate U.S. GAAP guidance related to derivates and hedging activities
• recognize key characteristics of derivative instruments including measurement requirements identify items that are within the scope of ASC Topic 815
• recognize considerations related to embedded derivatives
• identify overall principles and requirements related to hedge accounting
• differentiate between types of hedge transactions recognize methods used for testing hedge effectiveness
• identify overall financial statement disclosure requirements related to derivatives and hedging
• recognize recent developments impacting accounting for derivatives and hedging activities