Greenwich Treasury was an early leader in developing effective FAS 133 hedging strategies. A month after FAS 133 was issued, we were in Munich in July 1988 advising Siemens on FAS 133 implementation. In October 1998, GTA gave the first ever public seminar on FAS 133. We have since expanded our FAS 133 derivative accounting expertise to IAS 39 and Section 3865, the comparable International and Canadian GAAP standards.
The value that we bring to all three standards is a deep understanding of how economic hedging objectives can be achieved on an effective GAAP hedge basis. With the convergence of worldwide accounting principles, our knowledge of all three standards provides useful and authoritative insights into how to interpret a particular GAAP standard. We use each GAAP's nuances to recharacterize the hedgeable items to document the effectiveness tests that best manage a client's trade-offs among termination risk, forecast error risk and P&L ineffectiveness. We also work with auditors to show how the hedge documentation is fully GAAP compliant.
FAS 133 Expertise
Greenwich Treasury has consulted on implementing FAS 133 with more than 30 companies, including BP, Boston Scientific, Engelhard, Ford, H-P, P&G, PepsiCo, Movado, and Unisys. We also have advised six treasury software vendors on FAS 133 compliance: Financial Sciences, FXpress, Principia Partners, SimCorp, SunGard, and Wall Street Systems.
Jeff Wallace wrote the FAS 133 chapter in The Handbook of International Finance & Accounting (2003, John Wiley & Sons). For a revised version of that chapter, download Derivative Accounting & Hedging Under FAS 133. Jeff also has written two articles, FAS 133 and IAS 39: The Train Has Left the Station (Treasury Management International, July/August 2000) and Foreign Exchange Hedging under FAS 133 (AFP Exchange, Fall 2000). Please see the articles tab for a number of presentations on FAS 133.
IFRS IAS 39 and Canadian GAAP Handbook Section 3865 Expertise
IAS 39 and Section 3865 share FAS 133's fair value measuring and effectiveness testing, but each has important differences. However, we have found that nearly all of our 133 hedging techniques can be successfully adapted for implementing and developing highly effective hedging policies and hedges under both standards.
In 2004, Greenwich Treasury Advisors initiated "The Group of 31," an informal group of large European and American multinationals. A recently completed G31 project is changing IAS 39 to be more like FAS 133. Jeff Wallace met with members of the IASB Board to discuss issues important to the Group.
As part of that project, Jeff wrote Effective Hedging Under IAS 39 showing how the many apparent differences between IAS 39 and FAS 133 can be successfully resolved, including IAS 39 hedging of forecast interco flows, highly effective hedges for perfect interest rate and cross-currency interest rate swaps, netting of cash flow exposures and option hedging.
In Toronto and Calgary, beginning in May 2002, Jeff has given over 12 public workshops on Canadian GAAP hedging. He has had several assignments involving Canadian GAAP hedging with Canadian companies.
In addition to the Canadian seminars, we have given more than 25 public FAS 133 seminars in the US, under our own name and with New York University and International Treasurer. In Europe in 2000, we gave six public one-day seminars on FAS 133 and IAS 39 that were organized with Treasury Management International. We have also given FAS 133 presentations to the NACT and to the Conference Board.
In addition to consulting, GTA offers in-house seminars on the basic concepts of FAS 133 and how they apply to FX, interest rate, and commodity hedging. These seminars have been given to such companies and banks as Amgen, Deutsche Bank, Saint-Gobain, and National Australia Bank.