Due Diligence & Distinguishing FX Derivatives

Due diligence is a term that commonly applies to a business investigation, and it contributes significantly to informed decision making by assessing the costs, benefits, and risks of a transaction. As due diligence relates to foreign exchange (FX) risk management, firms can enhance their strategic decision making process by assessing the costs, benefits, and risks associated with currency derivatives, and recognizing their differences and similarities when hedging foreign currency transactions.

At the highest level, currency derivatives are financial contracts between two parties whose value is derived from the exchange rate of one or more underlying currencies. FX risk management involves mitigating currency risk to an acceptable level by understanding when and how to hedge using FX derivatives to achieve FX objectives. The first part of the FX risk management decision making process is determining a firm’s FX hedging objectives and strategy for achieving those objectives.

The two most common FX risk management hedging objectives are (1) minimizing foreign exchange gains and losses in earnings and (2) preserving cash flows. The most common currency derivatives used in practice are (1) forward contracts, (2) vanilla options, and (3) zero cost collars. Therefore, to achieve the 2 most common hedging objectives using the 3 most common currency derivatives, it is helpful to compare and contrast how each derivative achieves each hedging objective as follows:

1) Forward Contracts

• Objective 1: Minimizing Earnings Volatility - Forwards are particularly attractive for firms that seek a symmetrical payoff profile relative to the spot foreign exchange rate, where the hedge achieves largely equal and offsetting gains and losses related to the underlying foreign exchange exposure. Forwards are by far the most effective derivative for eliminating foreign exchange gains and losses to the greatest extent possible, and are used overwhelmingly in practice for all types of FX hedges.
• Objective 2: Preserving Cash Flows - Forward contracts do not require an upfront premium to be paid, unlike an option. However, a forward contract will almost always finish in either an asset or liability position at maturity depending on the ending spot rate, which may require a cash payment to be made in the future to settle the contract.
• 3 Distinguishing Characteristics: 3 key distinguishing characteristics of forward contracts are their forward point premium or discount, the lack of upfront cost, and the symmetrical payoff profile relative to the spot foreign exchange rate.

2) Option Contracts

• Objective 1: Minimizing Earnings Volatility - Options are particularly attractive for firms that seek an asymmetrical payoff profile relative to the spot foreign exchange rate, where the hedge secures the value of an underlying position against unfavorable market moves beyond the strike rate, while retaining 100% participation in favorable market moves. Options do not provide the same degree of offset in earnings as a forward due to its asymmetrical payoff profile, and tend to be used for longer dated and/or uncertain exposures.
• Objective 2: Preserving Cash Flows - A purchased vanilla option requires a cash premium to be paid to the counterparty at inception, which can be a deterrent compared to a forward contract. However, an option will always expire with either a positive intrinsic value or zero fair value at maturity, ensuring no future cash payment is required by the option holder to settle the contract.
• 3 Distinguishing Characteristics: 3 key distinguishing characteristics of vanilla option contracts are the premium paid upfront, the asymmetrical payoff profile relative to the spot foreign exchange rate, and the lack of obligation to make a payment at maturity.

3) Zero Cost Collars

• Objective 1: Minimizing Earnings Volatility - Zero cost collars are particularly attractive for firms that seek to establish a predefined range of foreign exchange rates where the value of the hedged FX transaction is secured on the downside by the collar “floor” and limited to the upside by the collar “ceiling" or "cap”. Zero cost collars provide less downside protection and less of an offset in earnings relative to a forward contract, but allow for participation in favorable market moves like an option contract with no upfront premium.
• Objective 2: Preserving Cash Flows - Zero cost collars do not require an upfront premium to be paid by combining two vanilla options, (1) a purchased out of the money option and (2) a sold out of the money option, whereby the premium paid on the purchased option is offset by the premium received from the sold option to create a zero cash outlay. However, a collar has the potential to finish in a zero fair value, asset or liability position at maturity, which may require a future cash payment to be made to settle the contract.
• 3 Distinguishing Characteristics: 3 key distinguishing characteristics of zero cost collars are the ability to participate in favorable foreign exchange rate movements with no upfront cost, the reduced downside protection relative to a forward contract, and the unique payoff profile of the collar range relative to the spot foreign exchange rate.

Overall, each company must decide their FX hedging objectives and strategy for achieving those objectives that balances minimizing earnings volatility and preserving cash flows. There is no one prescribed method for selecting a FX derivative, and firms can benefit by approaching the selection of a derivative from a hedge objective perspective. As the late, great economist Milton Friedman said, “there is no free lunch” in economics, and when selecting a FX strategy, firms can benefit from recognizing the tradeoffs, differences and similarities of how the 3 most common currency derivatives can be used to achieve the 2 most common FX hedging objectives.

To learn more about FX derivatives, you can explore our previous blog post on “How to Compare Currency Derivatives & Credit Considerations” and sign up for FX Initiative’s currency risk management training. Our FX Spot & Derivatives Course deconstructs forward contracts, option contracts, and zero cost collars to help you select an optimal hedge instrument. Additionally, our FX Derivative Speculator illustrates the economics and accounting of derivative positions to compare and contrast the payoff profiles, cash flows and accounting entries under virtually any FX rate scenario. Start doing your derivative due diligence today by taking the FX Initiative!

Are you curious how forwards, options, and zero cost collars work in practice? Click here to learn from real-world examples!

Cheers,

The FX Initiative Team
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Balancing Brexit & FX Balance Sheet Hedging

As Brexit continues to capture news headlines, FX Initiative is increasingly helping North American companies manage the currency risk associated with doing business in the United Kingdom (UK). Brexit refers to the prospective withdrawal of the United Kingdom from the European Union (EU), which was voted on in June of 2016. Since the referendum, the value of the British pound (GBP) versus the US dollar (USD) has fluctuated from highs near 1.4500 levels in June of 2016 to lows near 1.2000 levels in January of 2017. This approximate 15% decline in value has prompted many international companies to adapt their foreign exchange (FX) hedging programs to better stabilize earnings and preserve cash flows.

American companies exporting to the United Kingdom have seen significant fluctuations in their GBP denominated revenues and accounts receivables (A/R), which are translated into USD in their financial statements for accounting purposes. To state the obvious, the 15% fluctuation in GBP/USD exchange rates over a 15 month period has created sizable swings in earnings and cash flows for firms that operate with a non-GBP functional currency. To mitigate this volatility, one major US pharmaceutical company needed to reconsider their FX balance sheet hedge program to better respond to the changing political landscape and unpredictable currency market prices.

Balance sheet hedging is by far the most common approach among multinational corporations when hedging foreign exchange risk, and in the context of Brexit, refers to hedging GBP denominated receivables and payables on the balance sheet as part of a systematic hedge program at each period or month end, or upon booking a material foreign currency denominated transaction. This US pharmaceutical company was previously hedging at each month end to adjust and match the amount of the their underlying GBP receivables with the amount of their GBP forward contract hedges. However, the majority of their monthly receivable bookings occurred on the 15th of each month, and their mid-month A/R bookings were largely unhedged from the middle of the month through month end.

To address this problem, FX Initiative helped assess the mechanics of their balance sheet hedge program by looking at their financial reporting process and specifically at their accounting booking convention. An accounting booking convention refers to the foreign exchange rate used to record a transaction on the financial statements. In this case, they were using the daily spot rate, which meant they were exposed to changes in exchange rates for each mid-month booking of a material GBP receivable transaction. By probing all the way down to the accounting booking convention, this US company was able to quickly and effectively enhance their balance sheet hedge program by adding one additional “true-up” hedge mid-month.

Their revised approach meant that rather than only hedging at the end of each month, the company was now adjusting the amounts on their forward contract hedge both mid-month and at month end. The result of this fundamental fix was that the company is now hedging over 90% of their GBP exposure for the entire month, and the FX swings in their monthly and quarterly earnings have declined by over 50%. Regardless of whether you are a FX risk management expert or novice, knowing where to diagnose a FX exposure is critical and having the ability to drill down to a technical level of detail such as an accounting booking convention can help companies conquer currency market challenges more efficiently and effectively.

FX Initiative’s training and consulting services can help your global organization establish and improve your foreign exchange balance sheet hedge program. We use real-world examples from Apple to demonstrate how a balance sheet hedge works in practice, and our risk modeling tools enable you to practice your approach prior to implementation to get comfortable with the economics and accounting. While events like Brexit are hard to predict, a consistent and ongoing foreign exchange risk management program can proactively protect against changing political, regulatory, and economic environments. FX hedging is about making the outcome more certain, so give your company the FX certainty and predictably it needs to succeed abroad by taking the FX Initiative!

Ready to build a better FX balance sheet hedge program? Click here to start your Currency Risk Management training!

Cheers,

The FX Initiative Team
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Grasping Groupon’s Passive FX Risk Management

FX Initiative analyzes how publicly traded companies manage foreign exchange risk. This analysis will focus on Groupon, a Chicago based worldwide e-commerce marketplace, and their passive approach to FX risk management. Using their 10-Q for the quarterly period ended June 30, 2017, let’s explore Groupon’s International segment and its FX impact on their Income Statement.

The Income Statement shows a company’s revenues and expenses during a particular period. The Income Statement in simplest terms totals revenues and subtracts expenses to find the bottom line or net income for the period. Using Groupon’s reported numbers from their Securities and Exchange filing, their International segment’s Income Statement is as follows:

^{_{Source: http://investor.groupon.com/secfiling.cfm?filingID=1490281-17-111}}

The words "foreign exchange", "foreign currency", and "FX" are mentioned 12 times in their earnings announcement, yet Groupon (unlike leading technology companies such as Apple and Google) is not managing their foreign exchange risk at all. Let’s examine Groupon’s FX risk profile by digging into their revenue, expense, and gross profit figures.

• Revenues - Groupon’s revenue increased $27 million in their International segment, but declined $13.8 million due to changes in foreign exchange rates. In other words, Groupon intentionally grew their International revenue by increasing transactions in their Goods category, but unintentionally lost over 50% of that growth due to unhedged foreign exchange risk.
• Expenses - Groupon’s International segment expenses (cost of revenue) increased $29.9 million, but declined $6.9 million due to changes in foreign exchange rates. This increase in expenses was attributable to increases in direct revenue transactions in their Goods category, and unhedged FX risk reduced those expenses favorably but unintentionally by roughly 23%.
• Gross Profit - Groupon’s International segment’s gross profit declined by over $19 million or nearly 10%, and $6.9 million was lost due to unhedged foreign exchange risk. Not only did Groupon’s International segment report lower gross profit across all three of their Local, Goods and Travel categories, they lost even more money as a result of not managing their FX risk exposures.

Groupon’s International segment accounts for approximately 30% of their total revenue, which is a material amount. In comparison, Apple’s International sales accounted for 61% of their third quarter 2017 revenue, and they were awarded the Best Corporation in the World for FX Management by Global Finance Magazine in their 2017 Corporate FX Awards.

Whether you are a shareholder, vendor, creditor, employee or layperson, do you think Groupon should be managing their foreign exchange risk? FX Initiative’s training uses real world examples from Apple to demonstrate how multinational corporations like Groupon can significantly improve their international performance by employing currency risk management best practices.

If you are interested in learning how your organization can improve their foreign exchange risk management program, sign up for FX Initiative’s currency risk management training today. Our educational videos, interactive examples, and webinar events simplify complex FX risk management issues and equip you with actionable intelligence to effectively mitigate FX risk.

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The FX Initiative Team
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Identify the 5 Stages of the FX Trade Lifecycle

Foreign exchange trading is a critical element of currency risk management, and understanding the trade lifecycle can help organizations plan their hedging activities more efficiently and effectively. The foreign exchange trade lifecycle, as discussed in the FX Risk Management course, can be enhanced with automated resources and typically includes the following 5 stages:

1. The first stage involves identifying and evaluating exposures. To aid in the exposure identification and evaluation process, best practices relate to investment in quality automated resources such as an enterprise resource planning (ERP) system or treasury software application that can be set up to extract data across the enterprise to identify and evaluate foreign exchange exposures rather than manual analysis, which can be time consuming and limited in scope.
2. The second stage involves collecting and quantifying exposure details. These tasks can be automated through software modules such as a netting system for matching foreign currency inflows and outflows or a cash flow forecasting module for determining future exposures based on historical trends in comparison to manual collection and quantification processes through spreadsheets, which can be vulnerable to human errors and oversight.
3. The third stage involves developing and analyzing hedging strategies. This analysis process can be streamlined and structured with automated software that performs value at risk analyses and simulates hedge strategies such that scenarios can be modeled prior to trading in order to save significant time and costs down the road, whereas performing this analysis manually can limit the ability to compare economic and accounting strategies in a comparable format and in a time efficient manner.
4. The fourth stage involves the administration and execution of hedge strategies. This is increasingly facilitated through the integration of electronic trading platforms, where multi-provider execution platforms can be integrated for optimal rate bidding across numerous FX service providers in real time, coupled with automated straight though processing of trades with back office systems to handle transaction reporting, confirmation matching, and payments between counterparties rather than manually performing these critical tasks.
5. The fifth and final stage of the foreign exchange trade lifecycle is financial & managerial reporting. This communication and recordkeeping can be automated through the integration of accounting systems to enable seamless financial reporting for both internal and external audiences rather than manual reporting and compliance processes.

Overall, the 5 stages of the foreign exchange trade lifecycle include (1) identifying and evaluating exposures, (2) collecting and quantifying exposure details, (3) developing and analyzing hedging strategies, (4) administering and executing hedging strategies, and (5) financial accounting & managerial reporting. Each of these stages is essential when implementing foreign exchange trading best practices, and understanding the lifecylce can help organizations plan their hedging activities more efficiently and effectively.

To learn more about foreign exchange best practices and to observe how world class organizations such as Apple employ each stage of the FX trade lifecycle, sign up for FX Initiative’s currency risk management training. Our educational videos, interactive examples and webinar events can help you and your team better mitigate FX risk and deliver measurable results to the bottom line, so get started today by taking the FX Initiative!

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The FX Initiative Team
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How to Forecast Foreign Exchange Rates

Forecasting foreign exchange rates is a challenging but necessary aspect of currency risk management. There is no single prescribed method for FX forecasting, and it is a difficult task particularly for those who are not engaged in the market on a daily basis. FX forecasting has a relatively low predictive power as uncertainty always remains a factor, but nonetheless each market participant is responsible for developing an educated guess about what direction exchange rates will move in the short, medium, and long term. The following two techniques are used most commonly to generate an FX forecast.

1. Technical Analysis – Technical analysis uses historical market data to predict shorter and longer-term future exchange rate movements, whereby past prices and volume helps serve as a guide for the future.
2. Fundamental Analysis – Fundamental analysis uses current economic indicators to predict future exchange rates, and considers factors such as interest rates, earnings, employment, GDP, housing, and manufacturing among other areas to assess the present state of the economy and help guide the future.

Many market participants use a combination of both technical and fundamental analysis to develop a forecast. Applying these techniques using the euro as an example, a forecaster could use technical analysis by looking at the historical data provided by the Federal Reserve for the Euro/US dollar exchange rate since the introduction of the euro in 1999 to the present day. The forecaster can then observe the range of values, and identify that the high was 1.5759 in July of 2008 and the low was 0.8525 in October of 2000. Given the current euro exchange rate of 1.1800, the forecaster can conclude that the present valuation is towards the lower end of the trading range between 0.8525 and 1.5759 and perhaps is undervalued.

Building upon that premise, a forecaster can then use fundamental analysis to assess the current state of the economy in the Eurozone where the euro is used. If the forecaster anticipates a slowdown in economic growth, sluggish earnings, weaker employment, a decline in housing, manufacturing, and GDP, and a low interest rate environment, then there might be more room for the euro to depreciate. Conversely, if the forecaster expected strong growth in economic activity, healthy earnings, rising employment, positive trends in housing, manufacturing, and GDP, and a corresponding rise in interest rates, then perhaps the euro will appreciate in value.

All forecasts need to be scaled to a specific time frame, and each market participant must use their best judgment to assess how supply and demand factors will impact foreign exchange rates. There are various views and perspectives among market participants that can differ for good and substantive reasons, and the interpretation of how supply and demand factors determine exchange rates and the generation of a FX forecast is more of an art than a science. A sound foreign exchange market forecast can be challenging to develop in house, so some organizations rely on the consensus forecast among experts or research and insight shared by their banking partners or financial institution to help guide them.

To learn more about forecasting foreign exchange rates, sign up for FX Initiative’s currency risk management training for complete access to our educational videos, interactive examples, and live webinar events. We walk you through real-world scenarios and simulated strategies from leading global organization such as Apple to illustrate key learning concepts in a practical and easy to understand format. Foreign exchange is a key component of international business, and FX Initiative can help you mitigate risk and maximize opportunity abroad.

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The FX Initiative Team
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How to Compare Currency Derivatives & Credit Considerations

Foreign exchange risk management involves the use of currency derivatives, which are financial contracts between two parties whose value is derived from the exchange rate of one or more underlying currencies. In order to use currency derivatives to achieve foreign exchange risk management objectives, companies must be able to deal or trade with a credit worthy counterparty such as a bank or financial institution.

Counterparty credit risk is the risk that the counterparty to a contract does not perform, and is involved in any banking activity, including trading currency derivatives. Therefore, both parties in the transaction need to consider the financial condition of their counterparty by quantifying their creditworthiness. It can be helpful to compare key credit considerations between the three most common currency derivatives, which include forward contracts, vanilla options, and zero cost collars.

Forward contracts involve the exchange of two currencies at an agreed upon rate on the date of the contract for settlement on a date more than two business days in the future. A forward contract will almost always finish in either an asset or liability position at maturity depending on the ending spot rate. From a credit perspective, forward contracts usually do not require an upfront exchange of funds, but almost always requires a payment at maturity to settle the asset or liability position of the contract.

Option contracts are financial contracts that give the buyer the right, not the obligation, to buy or sell a quantity of a particular currency at a specific exchange rate, called the strike rate, on or before a pre-arranged date. A purchased option begins its life as an asset in the amount of the option premium paid to the counterparty at inception, and will expire with either a positive value or zero fair value. In other words, options require an upfront payment, but do not require the option holder to make a payment at maturity.

A zero cost collar is a combination of two vanilla options, whereby the premium paid on the purchased option is offset by the premium received from the sold option to create a zero cash outlay. This structure enables the holder to buy or sell a quantity of a particular currency within a specified range of exchange rates between the two option strikes on or before a pre-arranged date. In turn, collars do not require an upfront exchange of funds, but may require payment at maturity if the structure finishes in an asset or liability position.

The two key credit variables to consider are (1) the upfront exchanges of funds and (2) the obligation to make a payment at maturity. Since a forward contract is a firm obligation for a future settlement to be made with no upfront exchange of funds, this derivative has a higher credit risk than a purchased option where upfront premium is paid and there is no obligation for the option holder to make a payment at maturity. Similarly, since a collar may require a payment at maturity to settle the contract, collars are more credit intensive than vanilla options.

Conterparty credit risk became a prominent headline during the financial crisis of 2007–2008, and remains an important factor to consider as credit limits may prohibit a firm or entity from entering into a derivative transaction, particularly in a tight credit economy. When credit constraints inhibit business decisions, firms may need to consider alternative means to transact such as posting collateral. When trading FX derivatives, the acronym KYC, which traditionally stands for Know Your Customer, can be modified to Know Your Counterparty.

If you are interested in learning more about foreign exchange derivatives, credit considerations, and how to hedge using financial instruments, sign up for FX Initiative’s Currency Risk Management Training today. Our educational videos, interactive examples, and webinar events use real world companies such as Apple, Inc. to illustrate aspects of their world class foreign exchange risk management policies and procedures. Mitigating currency risk is a top priority for global businesses, and you can benefit your firm’s bottom line by taking the FX Initiative!

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The FX Initiative Team
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How to Implement Internal Controls for FX Risk Management

Internal control (IC) involves everything that controls risks to an organization. IC relates to operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. When it comes to hedging foreign exchange risk and Sarbanes-Oxley (SOX), management should be able to understand, assess, and conclude on the adequacy of internal controls over financial reporting as it relates to currency risk management.

In general, a minimum of three personnel are required for sufficient internal controls since the trading, accounting, and confirmation duties should be segregated. For example, the Chief Financial Officer (CFO) could be responsible for confirmation and authorization, the controller could be responsible for accounting and record keeping, the treasurer could be responsible for trading and custody. Furthermore, the Board of Directors could be responsible for oversight and approval, and in the event that an exception to the Policy is warranted, the CFO could be responsible for approving any exceptions.

While specific internal controls will need to be tailored to the specific needs of an organization, some key questions that should be addressed include:

1. Who has the authority to execute trades?
2. How will trades be executed and what process should be followed?
3. How and when are trades confirmed and compared?
4. Are the trading, accounting, and confirmation duties segregated sufficiently?
5. Who has the authority to authorize policy exceptions, and trade ticket or accounting discrepancies?

It is critical to include internal controls as an essential component of an effective Foreign Exchange Risk Management Policy because it outlines in detail the specific processes to be followed. The Internal Controls section of a Policy should address the key questions above by stating internal controls have been set forth to segregate the trading, accounting, and confirmation processes. Continuing the example using the CFO, controller, and treasurer, internal controls could apply to the following FX Risk Management related tasks:

• The Treasurer will be responsible for recommending hedging strategies, and the Controller and Chief Financial Officer will be responsible for approving the proposed strategies prior to trade execution.
• The Treasurer will be responsible for selecting counterparty foreign exchange service providers in accordance with 'Counterparty Guidelines', and the Controller is responsible for approving the selected counterparty prior to trade execution.
• The Treasurer is responsible for executing approved hedging strategies and subsequently recording the transaction in the appropriate general ledger account within 24 hours. The Controller is responsible for confirming that the financial reporting surrounding trade execution matches the trade confirmation received by the counterparty service provider within 72 hours. If a trade confirmation is not received within 72 hours, the Controller is responsible for obtaining the confirmation directly from the counterparty service provider, mediating any disputes between the Treasurer and the counterparty service provider, and alerting the Chief Financial Officer of any pertinent issues.
• The Treasurer will prepare a cash reconciliation at each month end related to all underlying positions and derivative transactions, both inflows and outflows, that occurred throughout the period. The Controller will cross check the cash reconciliation with all trade confirmations to ensure cash balances reflected on the accounting records match the economics of the underlying positions and derivative transactions settled throughout the period.

These are just some of the many ways organizations engaged in foreign exchange risk management should be considering internal controls as part of their currency hedging program and formal Policy. Keep in mind that policies and procedures are never perfect, and should be viewed as a process that is responsive to change and capable of continuous enhancement. By starting sooner rather than later, practice, experience, and results will contribute better information to the internal control process allowing for changes to be made to the foreign exchange risk management program in the future.

If you are interested in learning how internal controls are integrated into a foreign exchange risk management policy, FX Initiative's currency risk management training has a course on FX Risk Management that walks you through a real-world scenario using the Foreign Exchange Risk Policy Drafter to illustrate step-by-step the process of segregation of duties and how it relates to personnel and reporting. World class organizations know that proactive prevention is the best approach to long-term compliance and sustainability, so take the FX Initiative and improve your internal control process by subscribing today!

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The FX Initiative Team
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Learn Best Practice Accounting for FX Derivatives

Foreign exchange accounting is a complex area of financial reporting that many global organizations struggle with. Adding to that complexity, companies engaged in foreign exchange risk management must also learn how to account for currency derivatives. While the specific accounting rules differ between generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS), the fundamental concepts are essential to understand when implementing foreign exchange risk management best practices for your international business.

Companies that hedge foreign exchange risk often have two main objectives: (1) To minimize the Income Statement impact of fluctuating foreign exchange rates, and (2) to reduce the variability in functional currency equivalent cash flows resulting from foreign currency transactions. In order to achieve the objective of minimizing the Income Statement impact of fluctuating foreign exchange rates, it is important to first consider the accounting treatment for the underlying position, and then to align the accounting treatment for the FX derivative accordingly.

At the highest level, companies can account for FX derivatives using “default” accounting treatment or “elective” accounting treatment. The “default accounting treatment requires that derivative gains and losses should be recorded in earnings on a current basis based on changes in their fair market value. The “elective” accounting treatment permits special accounting that results in changes in the fair value of the derivative to be recorded in the equity section of the balance sheet (rather than earnings) as part of other comprehensive income and then reclassified from the balance sheet to the income statement in the period or periods in which the underlying hedged item impacts consolidated earnings.

While the rules of elective accounting treatment can get quite complex, the key take away is that elective accounting treatment provides financial reporting benefits when hedging underlying exposures that do not impact the income statement on a current basis, such as forecasted transactions. Therefore, firms have a choice between the “default” and “elective” accounting treatment. FX Initiative’s currency risk management training addresses several variables to consider when choosing the most appropriate course of action for FX derivative accounting.

If you are interested in learning more about accounting for FX derivatives, FX Initiative’s currency risk management training walks you through real-world scenarios using Apple as an example. Specifically, we cover hedging forecasted revenue transactions, booked receivable transactions, and net investments in foreign subsidiaries using both elective and default accounting treatment. Learning how to account for FX derivatives is critical in order to achieve your foreign exchange risk management objectives. Start learning today by taking the FX Initiative!

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The FX Initiative Team
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Download the PDF Brochure to learn about FX Initiative!

Are you curious how FX Initiative can help you with currency risk management? Download the PDF brochure and learn why Fortune 500 companies, small and medium sized enterprises (SME), and sales teams of financial institutions trust FX Initiative to learn foreign exchange best practices.

For over a decade, we’ve been training Fortune 500 companies, global businesses, treasury professionals, and FX sales teams on foreign exchange risk management best practices. While all client’s had different objectives and challenges, all benefited from the unparalleled foreign exchange (FX) and continuing professional education (CPE) resources FX Initiative’s currency risk management training provides created by industry expert & trainer Evan Mahoney, CPA. Whether you’re new to foreign exchange or a seasoned professional, your questions will be answered, your challenges will be addressed, and you will leave with an actionable plan for managing currency risk.

Download the PDF Brochure

Self-Study currency risk management training with Evan Mahoney is the gold standard for meeting your organization’s professional development needs. Live webinar sessions that are fully customized can be added to enhance your learning experience and address and solve company specific challenges. Evan has a passion for teaching that shines through in his recorded presentations and live events alike. Evan’s training is so effective that over 90% of trainees went from scoring less than <70% on the Pre-Training Evaluation to earning a perfect 100% score post-training. Not only does this show the growth in knowledge each student experiences, but it leaves a lasting foundation of information to access daily. Our best source of new clients comes from satisfied customers that have benefited directly from our Currency Risk Management Training. You can take full advantage by combining self-study training and customized live webinars to ensure your organization has the resources needed to optimize and mitigate FX risk. Our training is accessible globally and available around the clock to meet your needs.

Evan Mahoney has over a decade of foreign exchange experience, and has helped hundreds of companies identify, assess, and mitigate foreign exchange risk. Evan’s strong finance and accounting background offers a unique skill set for solving technical strategy, policy, and financial reporting challenges in a manner that allows clients to understand and address their currency risk management issues at hand. Evan is an experienced practitioner and established thought leader available to service your organizations’ ongoing currency risk management training and professional development needs. Want to discuss Currency Risk Management Training with Evan Mahoney? Call 312-566-7475 or email evan.mahoney@fxinitiative.com today!

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The FX Initiative Team
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Are you a foreign exchange expert? Take the FX pre-test evaluation to see how you perform using our scoring brackets!

Whether you’re an experienced professional or brand new to foreign exchange, FX Initiative’s Currency Risk Management Training helps you learn currency risk management best practices using a video based on-demand format with real-world examples. Complete your FX training today in 4 simple steps:

1. Select Your FX Risk Management Training Program
2. Complete Your FX Risk Management Training Education
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The FX Initiative Team
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