Hedging FX Transactions

Complete the Hedging FX Transactions course!

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Course Summary

"Hedging is not about gaining or losing, it's about making the outcome more certain.”  This common phrase highlights that the key objective of hedging foreign exchange risk is to reduce uncertainty. Once an organization can identify the foreign exchange transaction risks within their business model, and is comfortable with the mechanics of common hedge instruments, they are ready to analyze how underlying transactions and derivative instruments can work in tandem to create an effective hedge.

A foreign currency hedge involves taking an offsetting position in a specific currency in order to reduce the impact of unfavorable foreign exchange rate fluctuations, whereby when the underlying position incurs a loss, the hedge incurs a gain, and vice versa. Companies that hedge foreign exchange transaction 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.

Global business leaders know the benefits of hedging, and the impact on cash flows and the financial statements. This program will help you understand the fundamentals of hedging forecasted and booked foreign exchange transactions, and recognize the economic and accounting implications of hedging with derivatives using the “default” and “elective” accounting treatment. Upon completion of this course, you will recall real world examples of hedging foreign currency transactions and learn how public and private companies alike can achieve common FX risk management objectives when conducting business internationally.

Questions to Consider
  • Do you want to know how to lock in the value of a foreign currency transaction regardless of where exchange rates move?
  • Are you aware that there is more than one way to account for derivatives?
  • Would you like to see an economic and accounting example of Apple hedging 1 billion euros of forecasted revenue?
  • Can you picture how public and private companies differ when it comes to prioritizing risk management objectives?
  • By attending this 1 hour program, you will find solutions to all of these issues and see two examples of Apple protecting their bottom line from FX losses of over $100 million dollars.
Learning Objectives
  1. Explore the concept of hedging forecasted transactions, and recognize how "elective" accounting treatment can be used to mitigate earnings volatility and better align the economics and financial reporting of a hedge.
  2. Explore the concept of hedging booked transactions, and recognize how the "default" accounting treatment mitigates earnings volatility and closely aligns the economics and financial reporting of a hedge automatically.
Additional Information

Presenter: Evan Mahoney, CPA
Sponsor: FX Initiative, LLC
Last Review Date: September 2023
Course Expiration: 1 Year from Enrollment Date
Duration: 1 Hour
CPE Credits: 1 CPE Credit
Program Level: Basic
Prerequisites: None
Advanced Preparation: None
Delivery Method: QAS Online Self Study
Field of Study: Management Services

To contact us about this program, including complaint, refund, and cancellation policy information, please email support@fxinitiative.com or call (312) 566-7475.


FX Initiative, LLC (Sponsor ID#112915) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Concerns regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org