In both cases, accountants will have to look beyond training solely dedicated
to IFRS. For example, in both cases hedge accounting requirements will become a
While some will have already enrolled in the relevant training, others may
still be procrastinating about which course to take. Regardless of whether you
work in public or unlisted companies,it may be worth getting to grips with hedge
One instance where hedge accounting may be adopted is if the movements on
derivatives are significant and might impact upon the distributable profits of
the business holding them. This could ultimately affect the ability of the
parent company to pay dividends to its shareholders (or might reduce the
dividend cover to an unacceptable level).
Accountants that are able to guide colleagues through the necessary
complexities of hedge accounting in such instances are essential. The relevant
continuous professional development training will also allow you to stand out
from colleagues who aren’t as well versed in the rules, enabling you to showcase
your new set of skills.
The aim of hedge accounting requirements is to make the income statement
clearer. In technical terms, it ensures that the change in value of derivatives
used as a hedge only hit the income statement at such time as the transaction
they are hedging do. There are also onerous documentary requirements for every
hedge where hedge accounting treatment is sought.
Accountants must make sure they devote enough resources to ensure that all
hedge accounting requirements are met if they want the income statement to be
less volatile. Therefore, for accountants in both listed and unlisted companies,
it is important for them to have a full knowledge of when and how to implement
The benefits of taking a hedge accounting course may not seem immediately
obvious to all accountants. But, for some, it is a necessary requirement and is
a practical solution for fulfilling your CPD hours in 2007.
Bob Hawkins is chief executive of professional
development at BPP Professional Education