Highlighting FX Hedge Objectives

Highlighting FX Hedge Objectives (Video): Discover how public and private companies prioritize earnings and cash flows when hedging foreign exchange (FX) risk. This video is a preview of FX Initiative’s Hedging FX Transactions course as part of Learning Objective #1.

To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com.

Prioritizing Professional Development Plans

Professional development in the workplace often refers to required employee training in areas such as workplace safety, corporate policies, and industry specific rules and regulations. While this training is commonplace in the corporate setting, it rarely provides value add to the employee or organization in terms of job performance and profitability.

FX Initiative's approach to professional development focuses on practical employee training and delivering actionable insights. We start by identifying knowledge gaps using our Pre-Test Evaluation, then we close those knowledge gaps with our on-demand educational videos, and we reinforce our learning concepts using real-world examples.

Professionals tasked with foreign exchange risk management often know their goals and objectives, but struggle with how to achieve them due to lack of training. Without practicing what you've learned and investing time and resources into education, it seems unrealistic to expect positive bottom line results and achievement of target plans.

The organizations FX Initiative works with recognize that investing in quality training that directly relates to employee job responsibilities benefits both the employee and the bottom line. Not only are employees more knowledgeable and capable after completing our training, but they are able to apply their knowledge for the benefit of their customers and the firm.

FX training is a win-win outcome.

1. FX sales teams are able to have deeper conversations with clients, gain a better understanding of problems and available solutions, and secure long-term relationships that are mutually beneficial to both parties.
2. Treasury professionals are able to significantly reduce FX gains and losses, preserve cash flows from FX transactions, and articulate their results more clearly and confidently to senior management.

FX Initiative's Currency Risk Management Training provides a valuable turnkey plan for learning foreign exchange that helps FX sales teams collaborate more effectively with treasury professionals. FX service providers and global firms can take full advantage of our unique FX training opportunity by proactively investing in their employees and organizations. Professional development is no longer something to simply check off the list, it is now a priority for global companies and their employees to remain competitive and profitable.

To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com.

Structuring Summer CPE Sessions

Summer is an ideal season to structure learning and earning opportunities. From sharpening skills to sharing insights, our continuing professional education (CPE) sessions are designed to serve your organization’s professional development needs. Through live webinar training, we provide internal and external marketing opportunities to capitalize on recent events impacting the foreign exchange market, as well as to coincide with quarterly or annual planning processes.

Whether you are interested in a timely session related to current events such as COVID-19 or would like a formal way to start goal setting for a new calendar or fiscal year, our live webinar sessions are fully customizable and capable of addressing your group training needs. Each live webinar is eligible for CPE credit, and offers the ability to collaborate on content, engage the audience with real time poling and survey questions, and participate in question and answer segments.

Our CPE programs help organizations around the world stay current on the latest regulations, developments, and trends in finance, accounting, and related business industries while earning CPE credits to maintain professional credentials. As a member of the NASBA National Registry of CPE Sponsors, we cover a broad range of knowledge, skills, and abilities that enhance competence and increase confidence in participants’ ability to improve performance and profitability.

Leading organizations that prioritize professional development realize greater return on investment (ROI). Quality training that directly relates to job responsibilities benefits both the employee and the bottom line. Not only are employees more knowledgeable and capable after completing our training, but they are able to apply their knowledge for the benefit of their customers and the firm. To learn more about CPE opportunities, please contact support@fxinitiative.com.

Highlighting FX Hedge Objectives (Video)

Highlighting FX Hedge Objectives (Video): Discover how public and private companies prioritize earnings and cash flows when hedging foreign exchange (FX) risk. This video is a preview of FX Initiative’s Hedging FX Transactions course as part of Learning Objective #1.

To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com.

Professional Development Planning & Profitability

Professional development in the workplace often refers to required employee training in areas such as workplace safety, corporate policies, and industry specific rules and regulations. While this training is commonplace in the corporate setting, it rarely provides value add to the employee or organization in terms of job performance and profitability.

FX Initiative's approach to professional development focuses on practical employee training and delivering actionable insights. We start by identifying knowledge gaps using our Pre-Test Evaluation, then we close those knowledge gaps with our on-demand educational videos, and we reinforce our learning concepts using real-world examples.

Professionals tasked with foreign exchange risk management often know their goals and objectives, but struggle with how to achieve them due to lack of training. Without practicing what you've learned and investing time and resources into education, it seems unrealistic to expect positive bottom line results and achievement of target plans.

The organizations FX Initiative works with recognize that investing in quality training that directly relates to employee job responsibilities benefits both the employee and the bottom line. Not only are employees more knowledgeable and capable after completing our training, but they are able to apply their knowledge for the benefit of their customers and the firm.

FX training is a win-win outcome.

1. FX sales teams are able to have deeper conversations with clients, gain a better understanding of problems and available solutions, and secure long-term relationships that are mutually beneficial to both parties.
2. Treasury professionals are able to significantly reduce FX gains and losses, preserve cash flows from FX transactions, and articulate their results more clearly and confidently to senior management.

FX Initiative's Currency Risk Management Training provides a valuable turnkey plan for learning foreign exchange that helps FX sales teams collaborate more effectively with treasury professionals. FX service providers and global firms can take full advantage of our unique FX training opportunity by proactively investing in their employees and organizations. Professional development is no longer something to simply check off the list, it is now a priority for global companies and their employees to remain competitive and profitable.

To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com.

Identify The Top Two FX Hedge Objectives

Ready to optimize your firm’s FX hedge objectives? FX Initiative’s Hedging FX Transactions course covers best practices employed by Fortune 500 companies and small and medium-sized enterprises (SMEs) for achieving the top two FX hedge objectives, illustrated in detail with real world economic and accounting examples. Get started with our foreign exchange risk management training, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples and events at FXCPE.com. Start Training >

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Identify the Top Two FX Hedge Objectives

Companies that hedge foreign exchange must establish clear objectives in order to gauge the efficacy of their FX risk management program. While the priority of hedge objectives can vary between public and private companies, the same two overarching goals apply: (1) minimizing earnings volatility and (2) preserving cash flows. Gaining a better understanding of these two objectives can help organizations better decide how to allocate resources to achieve their desired economic and accounting results.

First, minimizing earnings volatility means neutralizing to the greatest extent possible the Income Statement impact of fluctuating foreign exchange rates. At the highest level, this requires aligning the accounting treatment for the derivative with the accounting treatment for the underlying exposure to achieve equal and offsetting gains and losses at the same time and in the same geographic area of the financial statements.

When hedging forecasted transactions that do not impact the Income Statement on a current basis, minimizing earning volatility often involves the use of elective “cash flow” hedge accounting treatment, which provides the timing benefit of deferring derivative mark-to-market gains and losses in equity during the forecast period and the geography benefit of accounting for the derivative gain or loss in the same financial statement line item as the forecasted exposure.

When hedging booked transactions that do impact the Income Statement on a current basis, neutralizing earning volatility refers to using the "default" accounting treatment, whereby the highly visible foreign exchange gains and losses related to the underlying exposure and the derivative hedging instrument work in tandem to create a largely equal offset in earnings that mitigates Income Statement volatility automatically at the end of each reporting period.

When hedging net investments in foreign subsidiaries that are accounted for in equity, reducing earning volatility means using elective "net investment" hedge accounting treatment, which allows for derivative gains and losses to be recorded in other comprehensive income (OCI), which is a component of equity, as part of the cumulative translation adjustment (CTA) until the point in time that a sale or liquidation event of the net investment occurs.

Second, preserving cash flows means reducing the variability in functional currency equivalent cash flows resulting from foreign currency transactions. When hedging booked and forecasted transactions, this means hedging to stabilize the amount of cash received or paid upon conversion of the foreign currency at a later date. When hedging net investments in foreign subsidiaries, preserving cash flows can involve a variety of strategies depending on the short and long term goals of the organization. For example, 3 different cash flow strategies include, (1) hedging excess cash balances that are held by foreign subsidiaries and that may eventually be remitted back to the parent, (2) hedging the value of a net investment position to preserve cash flows related to an anticipated sale or liquidation event of the foreign operation in the short or medium term, or (3) not hedging the position in a long term foreign subsidiary that may require cash settlement upon expiration of the derivative instrument.

While these concepts can get quite technical in detail, the overarching theme is that both public and private companies are focusing on the same two foreign exchange risk management hedging objectives: (1) minimizing earning volatility and (2) preserving cash flows. Public companies are often most concerned with mitigating periodic earnings volatility, which suggests they prioritize goal number 1 of minimizing earnings volatility over preserving cash flows. In contrast, private companies are usually more concerned about the economics over the accounting implications, which implies they focus more on preserving cash flows first and foremost. The key highlight is that public and private companies usually have different priorities between the same two FX hedge objectives.

To learn how your organization can prioritize and achieve your company’s specific hedging objectives, sign up for FX Initiative's currency risk management training to start learning best practices. We offer a complete continuing professional education (CPE) curriculum for controlling currency risk consisting of on-demand educational videos, interactive real-world examples, and live webinar events that can be customized to your organization’s particular needs. Take the FX Initiative today to learn how we help both Fortune 500 companies and small and medium-sized enterprises (SMEs) understand, identify, assess and mitigate foreign exchange risk.

Ready to achieve your FX Risk Management objectives? Click here to get started >

The FX Initiative Team
support@fxinitiative.com