Hedge Accounting Specialists. Clean Audits, Zero Surprises.
We are APAC's only dedicated hedge accounting firm. Our focus is helping CFOs and finance teams achieve clean audits, full IFRS 9 compliance, and to have complete confidence in their hedge accounting programs.
What is hedge accounting?
Hedge accounting is the specialised financial reporting methodology that links the timing of gains and losses on a hedging instrument (such as a derivative or forward contract) with the hedged item (such as foreign currency revenue, interest rate exposure, or commodity costs).
We take this a step further, by ensuring that under the practices of IFRS 9 and AASB 9, we reduce P&L volatility by allowing gains and losses on hedging instruments to be recognised in the same period as the hedged item, provided the hedge relationship is properly documented, tested for effectiveness, and disclosed.
Why Hedge Accounting Matters Under
IFRS 9
Maximising profit is not just selling a product for more than it cost to get it to market. Without hedge accounting, changes in the fair value of derivatives flow directly to profit or loss, creating earnings volatility that masks underlying business performance.
With an accountant who conforms to IFRS 9, your documentation, effectiveness testing, and disclosures can be developed in such a way that allows you to align your financial reporting with your risk management strategy.
Who Needs Hedge Accounting?
If you are a company that uses derivatives or forward contracts to manage financial risk, then you will likely benefit from hedge accounting. This includes ASX-listed companies managing foreign currency revenue, property developers with interest rate swaps, importers with FX forward contracts, and commodity producers hedging future sales.
How Hedge Effective Advisory Helps
We provide end-to-end hedge accounting support across three integrated pillars. We work across strategic advisory and documentation to fully outsourced monthly reporting and offer our proprietary software as well.
01:
Advisory Services
From one-off policy advice, technical accounting position papers, policy documentation, effectiveness testing methodology, audit readiness or a review of your current hedge accounting set-up, we can help.
Our advisory services are ideal for finance teams who need specialist expertise without a full-time hire.
02:
Managed Services
This is our fully outsourced hedge accounting offering. Our proven 8-pillar framework builds a hedge accounting program around your risk profile, maximising effectiveness and minimising volatility.
And to take the pressure off even more, your team gets clean, board-ready reports every month.
03:
Hedgehog Software
Our proprietary advisory-tech platform delivers CFOs real-time visibility into hedge positions, effectiveness ratios, and audit trails, without you needing to lift a finger.
-
A robust hedge accounting strategy, tailored to your organisation’s unique requirements and objectives, is paramount for success. A high-level strategy aligns your hedging activities with your risk management and financial reporting goals.
-
A formal Derivative and Hedge Accounting Policy is crucial for establishing a solid foundation. Your comprehensive policy document should outline the framework for managing derivatives, hedge relationships, accounting methodologies, and risk assessment procedures.
Your policy should serve as a reference point for employees and auditors, to enhance transparency and ensure adherence to best practices.
-
Proper hedge accounting documentation of the necessary information to satisfy regulatory requirements is essential. Clear and accurate documentation not only strengthens internal controls but also facilitates audit processes and reduces the risk of misinterpretation.
-
Timely and accurate accounting entries – such as consistent general ledger journals related to derivative transaction and hedge effectiveness – are critical for maintaining a reliable hedge accounting program. Independent valuations will ensure the fair representation of hedging instruments on financial statements and enhance the credibility of your reporting.
-
IFRS 9 mandates regular testing to assess the effectiveness of hedge relationships. By monitoring and analysing the correlation between hedging instruments and underlying exposures, utilising our systematic hedge effectiveness testing framework, you can proactively identify any issues and make necessary adjustments to remain compliant with accounting standards.
-
Transparent and informative hedge accounting disclosures provide stakeholders with a comprehensive understanding of your organisation’s risk management strategies, fostering investor confidence by accurately describing the nature and impact of hedging activities in your financial statements.
-
By managing and optimising the optics of reported results – aligning hedging strategies with your financial goals – you can enhance the stability of your earnings profile, reduce volatility, and improve performance metrics.
-
Ensure hedge accounting compliance with both GAAP and IFRS requirements to streamline your audit process. By implementing best practices, enhancing internal controls, and minimising the risk of misstatements, you can reduce audit fees and enhance the accuracy of your financial reporting.
The HEDGEHOG Method
Hedge Effective Advisory’s proprietary 8-pillar framework ensures every hedge accounting program is built on a foundation that auditors recognise and regulators respect. Whether it is high-level strategy or ongoing execution, our HEDGEHOG Method leaves nothing to chance.
>$10 Billion
in Hedge Notional Managed
From FX forwards to interest rate swaps and commodity hedges, the team at Hedge Effective have managed and reported on hedge programs with a combined notional value exceeding $10 billion.
Results that speak for themselves.
75+
Companies Across APAC
From FX forwards to interest rate swaps and commodity hedges, the team at Hedge Effective have managed and reported on hedge programs with a combined notional value exceeding $10 billion.
100%
Clean Audit Record
From FX forwards to interest rate swaps and commodity hedges, the team at Hedge Effective have managed and reported on hedge programs with a combined notional value exceeding $10 billion.
No. 1
Dedicated Hedge Accounting Firm in APAC
From FX forwards to interest rate swaps and commodity hedges, the team at Hedge Effective have managed and reported on hedge programs with a combined notional value exceeding $10 billion.
Trusted by Organisations Across APAC
-
![PW3 logo with the tagline 'Advanced Cooling Technology' on a black background.]()
"Kevin and the team at Hedge Effective Advisory provide a comprehensive suite of tools, reports and support services for hedge accounting. We have found Kevin and the team to be responsive and professional. Highly recommended!!"
Martin McIver - CFO - PWR Advanced Cooling Tech
-
![A graph of the COVID-19 outbreak in the United States with the number of cases and deaths over time.]()
“Kevin at Hedge Effective Advisory was a pleasure to engage with to implement a hedge accounting solution. He has comprehensive knowledge of hedge accounting and was able to provide advice and support to our process to designate derivatives and satisfy hedge accounting criteria. Kevin was aware and understanding of our needs. The solution included informing and providing guidance on AASB 9, briefings with auditors, journal entries, and the preparation of accounting policies and position papers. Kevin was very responsive and created a seamless solution for our Finance team. I was very impressed with Hedge Effective Advisory and will continue to engage with Kevin into the future.”
Paul Garvey - CFO - Taurus Motor Finance now Metrics
-
![Coex Capital logo with stylized text and a geometric design at the top.]()
"Kevin and the team at Hedge Effective have provided a comprehensive solution to Coex Capital's hedge accounting requirements relating to interest rate swaps. The team took the time to properly understand our requirements and the solution scoped and implemented has done exactly as promised. Just as importantly, the team have shown to be extremely professional and a pleasure to work with."
Iain Lyle - CFO - Coex Capital
-
![SGFleet logo with the word 'sgfleet' in black text and three stylized gray lines underneath.]()
Kevin and the team at Hedge Effective Advisory are hugely experienced in this complex world of hedge accounting. "I wouldn't hesitate to refer them to people"
Ajinesh Singh - Treasury Manager - SG Fleet
Insights & resources
Hedge Accounting Unlocked
Written by accounting and treasury expert Kevin Mitchell, this book provides a straightforward methodology to optimise your hedge accounting program, whether dealing with foreign exchange, interest rate, or commodity price risks.
Free Resources
Templates, guides, and webinars to help you get on top of hedge accounting.
Interested in learning more about Hedge Accounting? Check back and stay up to date on the latest in IFRS 9 compliance, hedge accounting best practice, and regulatory updates.
Latest Insights
News, technical updates, and practical guidance from our specialists.
-
Hedge accounting is a financial reporting treatment conforming to IFRS 9 and AASB 9. It allows companies to reduce Profit and loss volatility by matching gains and losses on hedging instruments with the hedged items they protect, not writing them down to generic ledgers.
It is a heavily regulated area of accounting requiring proper documentation, effectiveness testing, and disclosure.
-
Hedge accounting is complex, highly regulated, and heavily scrutinised by auditors. If you are qualified you can do it yourself, however, a dedicated firm like Hedge Effective brings deep specialist expertise, proven methodologies, and software tools that generalist accountants or in-house teams rarely possess.
-
We are agnostic when it comes to helping our clients. We work with organisations across virtually every industry including: biotechnology, pharmaceuticals, logistics, property development, manufacturing, software, gold production, non-profits, and non-bank lenders.
-
The HEDGEHOG Method is our proprietary 8-pillar framework for designing, implementing, and maintaining hedge accounting programs that pass audit and meet IFRS 9 compliance standards.
-
Yes, we do. Our Managed Services team handles everything from documentation and MTM valuations to GL journals, effectiveness testing, and audit support. Each month we will provide you with clean, board-ready reports showing your performance.
Your questions, answered.
Ready to remove the guesswork from Hedge accounting?
If you want to learn more about Hedge Accounting, book a no-obligation discovery call with our founder, Kevin Mitchell. We will walk you through how we can help your team achieve clean audits and full compliance.