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Hedge accounting standard considerations for the consumer industry

What has changed and when to apply

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Hedge accounting standard considerations for the consumer industry

On August 28, 2017, the Financial Accounting Standards Board issued Accounting Standards Update 2017-12, Derivatives and Hedging (Topic 815): “Targeted Improvements to Accounting for Hedging Activities.” Podcast host Rich Paul, Deloitte & Touche LLP’s US Audit & Assurance Consumer industry leader, welcomes Deloitte & Touche LLP Audit & Assurance partners Jon Howard and Chris Monteilh to discuss the accounting standard and considerations for companies in the consumer industry.

Hedge accounting is now simpler to apply and to account for.

ASC 815 simplifies hedge accounting for consumer industry

Hedge accounting was designed to let companies match their input purchases with an offsetting position to minimize the bottom-line impact. But hedge accounting has been notoriously complicated. To make derivatives and hedging simpler, the Financial Accounting Standards Board (FASB) issued new hedge accounting standard ASC 815, which is part of ASU 2017-12.

FASB proposes improvement to hedge accounting guidance

On November 12, 2019, the FASB issued a proposed ASU that would clarify certain amendments made by ASU 2017-12 to the guidance in ASC 815 on hedging activities. The FASB issued the proposal in response to feedback and questions received from stakeholders related to their implementation of ASU 2017-12. Comments on the proposed ASU are due by January 13, 2020.

About Consumer Speaks

On the Consumer Speaks accounting and reporting podcast series, you’ll hear from our Deloitte leaders and professionals as they share their experiences and insights on timely topics across the automotive, consumer products, retail, wholesale and distribution, transportation, hospitality, and services industries. Stay informed on the hottest topics facing these industries and how they can affect your business.

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This podcast contains general information only and Deloitte is not, by means of this podcast, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This podcast is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this podcast.

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