Nov 07, 2016
From the Financial Reporting View
KPMG LLP recently commented on the proposed FASB ASU, Targeted Improvements to Accounting for Hedging Activities, which would provide additional opportunities to align hedge accounting with an entity’s risk management activities and has the potential to reduce the cost and effort required to apply hedge accounting.
The firm supports the Board’s efforts to improve the financial reporting for hedging relationships, align the financial reporting with the economic results of an entity’s risk management activities, and simplify application of the hedge accounting guidance. However, the firm suggested that the Board modify or clarify certain aspects of the proposal, including hedges of contractually specified components in a contract to purchase or sell a nonfinancial asset, and assessing hedge effectiveness.