Accounting for Derivative Instruments
and Hedging Activities

• September 15-16, 2010 — New York, NY Register Now!
• November 9-10, 2010 — Houston TX (Commodities Specific) Register Now!
• November 17-18, 2010 — Las Vegas, NV Register Now!

Conference Highlights Include:

Dynamic Learning

Highly interactive program integrating lectures and cases designed to highlight and clarify a host of implementation concerns.

If you or your clients are using derivatives to manage corporate risks associated with interest rates, foreign currency exposures, or commodity price risk, there's a strong likelihood that you'll want to account for your derivatives transactions using "special hedge accounting". Unfortunately, qualifying for such treatment is no easy task. This program is led by experts who can guide you through the relevant accounting literature -- formerly FAS 133, now covered under Topic 815 -- and assure that you'll be able to meet your objectives.

Well-designed case studies are used to give hands-on experiential insights as to how to implement the various accounting procedures relevant to derivatives transactions.

Accounting for derivatives and hedging transactions is no easy task. Under the rules, the same transactions may be accounted for in different ways, but some ways may be better than others. And determining the preferred treatment requires an appreciation of how derivative contracts work and what they can be expected to achieve. This program is designed to help attendees to view their use of derivatives the way the FASB does. The program points out areas of the accounting literature that are most controversial, highlights those areas that afford discretion on the part of those who prepare financial statements, and identify the choices that will most accurately reflect the risk management objectives of the firms.

Here's what you can expect from the program:

1. Exactly what's covered? Most of the instruments that are widely recognized as being derivatives are covered, of course; but in addition, the course highlights many contractual features that never before had been thought of as derivatives now qualify under the accounting rules.
2. When does special hedge accounting apply? Hedge accounting isn't automatic. FASB imposes rigid criteria that must be satisfied before hedge accounting becomes appropriate.
3. Once qualified, how does the accounting work for these hedges? In some cases the accounting differs for hedge results that are effective versus those that are ineffective. How does this work and how should effectiveness get evaluated?
4. What's required in the way of modeling and data processing in order to value derivative contracts? All qualifying derivatives must be marked-to-market and recorded on the balance sheet. This requirement imposes new demands on those in accounting functions. What do you need to know about how pricing models work and the critical assumptions underlying these valuations?
5. Journal entries, journal entries, and more journal entries. Examples are provided for all of the major types of hedge transactions. When dealing with derivatives, receiving the "best" hedge accounting is conditional upon having a precise understanding of the relevant accounting literature. We'll look to the rules and beyond to help you to gain full advantage of the discretion that is available to you.

Agenda

Day 1

Times	Topics	Speakers
9am - 10:45am	OVERVIEW OF TRADITIONAL DERIVATIVES: Basic terminology and market conventions Futures Forwards Options Swaps	IRA G. KAWALLER President Kawaller & Company, LLC
10:45am - 11:00am	Coffee Break
11:00am - 11:45am	DERIVATIVES ACCOUNTING OVERVIEW "Regular" accounting Special hedge accounting Fair value accounting Cash flow accounting Accounting for hedges of net investments	IRA G. KAWALLER President Kawaller & Company, LLC
11:45am - 12:30pm	HEDGE DOCUMENTATION REQUIREMENTS Pitfalls of identification "Excluded Items" Special treatment for purchased options, caps, and floors	IRA G. KAWALLER President Kawaller & Company, LLC
12:30pm - 1:30pm	LUNCHEON An opportunity to network with the faculty and your colleagues.
1:30pm - 2:30pm	EFFECTIVE TESTING ISSUES The "hypothetical derivative" concept Calculating dollar offset ratios A primer on the use of regression Audit/SEC concerns	IRA G. KAWALLER President Kawaller & Company, LLC
2:30pm - 3:00pm	DISCLOSURES FOR DERIVATIVES Review of requirements Common misrepresentations (to be avoided) Examination of sample presentations	IRA G. KAWALLER President Kawaller & Company, LLC
3:00pm - 3:15pm	COFFEE BREAK
3:15pm - 5:00pm	CURRENCY HEDGING Accounting for alternative exposure types Documentation pitfalls Uses of cross-currency interest rate swaps Consolidation issues	IRA G. KAWALLER President Kawaller & Company, LLC
5:00pm	DAY ONE ADJOURNMENT

Day 2

Times	Topics	Speakers
9:00am - 10:15am	HEDGING INTEREST RATE EXPOSURES Swap pricing Cash flow hedges for interest rate exposures Short cut vs. long haul Effectiveness concerns Case study: the perfect hedge	IRA G. KAWALLER President Kawaller & Company, LLC
10:15am - 10:30am	COFFEE BREAK
10:30am - 11:00pm	COMMODITY HEDGING Applying the normal purchase/sale exemption Documenting the hedging relationship Defining a hypothetical derivative Maintaining effectiveness when basis risk is evident	IRA G. KAWALLER President Kawaller & Company, LLC
11:00pm- 12:00pm	ACCOUNTING CASE STUDY This case demonstrates the process by which journal entries are determined when hedges are imperfect. It illustrates by example exactly how the amounts to be allocated to OCI and earnings are calculated and how amounts critical to required disclosures are determined.	IRA G. KAWALLER President Kawaller & Company, LLC
12:00pm - 1:00pm	LUNCHEON An opportunity to network with the faculty and your colleagues.
1:00pm - 2:00pm	NON-HEDGE CONCERNS Definition of a derivative Exemptions to the standard Embedded derivatives "Clearly-and-closely-related"	ART KULANS Manager Deloitte & Touche LLP (Chicago office)
2:00pm - 2:45pm	OTHER ACCOUNTING CONSIDERATIONS Derivatives and cash flow statements Issues relating to FAS 52 Bifurcation or the fair value election? International accounting standards Briefing on current FASB projects	ART KULANS Manager Deloitte & Touche LLP (Chicago office)
2:45pm - 3:30pm	OPEN DISCUSSION and Q & A: Current concerns of conference participants	IRA G. KAWALLER President Kawaller & Company, LLC ART KULANS Manager Deloitte & Touche LLP (Chicago office)
3:30pm	COURSE ADJOURNMENT

View Fall 2010 Derivatives Brochure.