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- Hedge Management
- Support of identification and designation of hedged items and hedging instruments for a hedging relationship
- Inclusion of a financial instrument with only a portion of its cash flows or fair value into the hedging relationship is possible
- Freely definable hedge names
- Choice of used hedge type and risk type
- Deal search with a wide range of filter criteria for finding perfectly fitting hedging instruments
- Portfolio assembly and time bucketing in the context of portfolio hedges
- Documentation of risk purpose and risk strategy as well as additional documentation set up in PDF, Word, Excel etc.
- Automatic event-driven messaging when ineffectiveness occurs
- Possibility of manual interaction such as rebalancing or termination.
- Valuation / Effectiveness Test
- The effectiveness test, financial accounting for hedged items and hedging instruments as well as reporting on hedge relations require fine granular valuation elements. These elements can be delivered by any third party tool or they can be calculated by Jabatix Finance FlexFinance components. These components are part of the blueprint “Valuation” and integrate perfectly with hedge components.
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- Hedge Financial Accounting
- Rule-based generation of debit/credit entries
- Rule-based generation of debit/credit entries
- Hedge Reporting
Different hedge types are permitted under hedge accounting.
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Jabatix supports the creation
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of
- Cash Flow Hedges
A future cash flow that is safeguarded against certain risks that might affect profit or loss is defined as a cash flow hedge.
A typical example of a cash flow hedge is the safeguarding of interest payments for a variable-rate bond by a receiver interest rate swap which entails transforming the future variable interest payments into payments with a fixed amount.
The accounting practice in the
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Jabatix Hedge Manager for hedged items and hedging instruments in a cash flow hedge fulfils the requirements for Hedge Accounting under IFRS. The hedged item is still valued and accounted for in accordance with the regulations in force while the hedging instrument is designated at full fair value and is disclosed at this value on the balance sheet.
- Fair Value Hedges
A fair value hedge entails safeguarding against fair value changes in hedged items and hedging instruments. The following are to be recognised in profit or loss:
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