Auditors and Finance Directors - FRS102

Whilst the date for the implementation of FRS102 is uncertain, that it will become effective is not doubted.  The 342 page document contains many changes.  The most important from a derivatives and risk management perspective is the requirement that off-balance sheet transactions such as interest rate swaps and foreign exchange forwards and options will now need to be marked-to-market, i.e. the cost (or benefit) of unwinding the transaction will have to be accounted for in the financial statements.

AHV provides an official valuation for such products in line with the requirements of FRS102 to auditors and companies alike.  The valuation of some products such as certain interest rate swaps and Fixed Rate Loans (and Tailored Business Loans) can be provided free of charge and on a regular basis.  Simply subscribe to this service for regular valuation updates by email. Please contact us to discuss your particular circumstances in more detail without obligation.

An exemption from the requirement of a valuation is the situation where a hedge off-sets a risk.  However, it is seldom the case that hedges are perfect.  Indeed a hedge may be utilised to off-set a portfolio of risks.  In such situations, expert opinion will be required as to the effectiveness of the hedge and the implications with regard to FRS102.  AHV can provide such an opinion backed up by rigorous analysis.