Accounting
ACCOUNTING SOFTWARE CONSULTING SERVICES
Over the past six years, we have helped several clients to implement derivative and fixed income accounting in best-of-breed technology platforms. These projects have involved gathering of comprehensive accounting business requirements, implementation, testing and other forms of assistance. Along the way, we have developed extensive experience in the design and implementation of chart of accounts, derivative and hedged instruments charts, and FAS 133 processing.
OUR AREAS OF EXPERTISE ARE:
- Front-to-back FAS 133 solution (read more here)
- Hedge effectiveness testing and measurements of ineffective hedge results
- Preparation of hedge designation memos
- Creation of journal entries for each hedging relationship
- Retrospective and prospective testing
- Classify assets and liabilities based on the fair value hierarchy
- Apply accepted techniques to measure fair value
- Determine a non-performance risk
- Work with auditing firms to ensure that assets and liabilities are correctly classified, as well as confirm that our methodology is adequately consistent with current practices
- Hedge effectiveness testing of derivatives using one of four testing methods. The four testing methods are consistent critical terms, synthetic instrument, dollar offset, or regression analysis
- GASB 53 compliance report to be used in financial statements
- Summary of the testing methodology and assumptions report
- Fair value calculation of each derivative in a client’s portfolio
- Footnote disclosure for the audit report
- Preparation of journal entries for the governmental entity
- Establish benchmarks for fair value calculations, by using historical trade reporting data from EMMA and yield curves from industry standard sources including MMD, MMA, and Bloomberg
- Proprietary pricing models for various issued debt, including Build America Bonds, fixed-rate bonds, variable rate demand bonds, and auction rate bonds
- Value credit enhanced debt, considering fair value accounting standards (Topic 820-10-35, formerly EITF 08-05)
- Structure each instrument based on the deposit to arrive at the current market value
- Focus on the term structure of interest rates and use of a discount cash flow