Hedge Accounting & Financial Reporting Services

DerivActiv continually updates hedge accounting methods to keep our clients current and compliant with ever changing accounting rules and regulations. DerivActiv provides hedge accounting services related to compliance with ASC 815 (previously FAS 133) Hedge Accounting, and ASC 815-10-50 (previously FAS 161) Disclosures about Derivatives.  We also provide hedge effectiveness testing and produce a report of the results for GASB 53 compliance.

 

ASC 815 Accounting for Derivative Instruments and Hedging Activities (Formerly FAS 133)

• DerivActiv provides a full range of services to help clients that elect to utilize the hedging provisions of ASC 815 to record their derivative transactions
• DerivActiv provides hedge designation memos, prospective and retrospective testing, and periodic journal entries for entities using hedge accounting

 

ASC 815-10-50 Disclosures about Derivatives (Formerly FAS 161)

• DerivActiv helps clients prepare the necessary disclosures describing the purpose and reason for using derivatives and the effects of hedging activities on their financial position and cash flows

 

GASB 53 for Governmental Entities

• DerivActiv helps governmental entities with hedge accounting, hedge effectiveness testing/calculations, journal entries, and the disclosures in financial statements that are required to comply with GASB 53

 

Valuation Services

DerivActiv provides daily mid-market valuations and ASC 820 fair values for investments and derivatives such as foreign currency transactions, interest rate swaps, bonds, mortgage-backed securities, equity swaps, and other financial instruments. These values can be used to meet ASC 820 Fair Value and can be used for testing hedging relationships in accordance with ASC 815 and GASB 53.

 

Daily Mid-Market Valuations Posted to Website

• End of day valuations
• Database of historical valuations

 

ASC 820 Fair Values

• DerivActiv is a leading provider of non-performance risk adjusted valuations on derivatives and other financial instruments for ASC 820 Compliance

 

ASC 820-10-35 Bond Valuations

• DerivActiv provides independent valuations for all types of issued debt including fixed-rate bonds, variable rate demand bonds, and auction rate bonds, as well as privately placed debt
• Our pricing methodologies for valuing credit enhanced debt take into consideration fair value accounting standards under ASC 820-10-35 and are accepted by auditors

 

GICVal

• DerivActiv provides independent, unbiased market valuations of Guaranteed Investment Contracts (GICs), Forward Delivery Agreements (FDAs or FPAs) and Repurchase Agreements (Repos)

 

Monitoring & Compliance Services

DerivActiv provides clients with a password protected, interactive website where they can track every derivative in their portfolio and perform active swap portfolio management. DerivActiv provides the following monitoring and compliance services:

 

Active Monitoring

• Daily mid-market valuations are provided for a broad range of financial products including equity, currency, commodity and fixed income securities, as well as all types of derivatives. Clients use DerivActiv to get daily mid-market values on an individual transaction or on their entire portfolio.

 

Monthly Reports

• Month-end valuation reports are grouped by bond series, counterparty, or other client selected categories
• Reports are stored in the “My Documents” section of the website

 

Payment Verification

• Calculates swap payments each time a payment is to be exchanged
• Identifies errors in counterparty payment advice
• Maintains historical payment database, which can be helpful for bond yield calculations

 

RatingsBell

• Monitors credit ratings of more than 180 counterparties on a daily basis
• Notifies clients as soon as ratings changes occur for their counterparties
• Sends regular updates to keep clients informed of overall counterparty credit ratings and outlook changes

 

Threshold Alerts

• Customized alerts provide an early warning of trends or events that may affect collateral positions or approaching target values
• Notifies clients of material agreement triggers

 

Sensitivity Analysis

• Shock interest rates as a way to identify the impact of changes in rates on the mark-to-market value of a financial transaction
• Interest rates can be shocked several different ways from simple parallel curve shifts to customized curve steepeners, flatteners, or inverters

 

Document Storage

• Transaction documents
• Special reports
• Monthly statements