Hedge accounting
Derivatives protect your cashflows — but accounting for them at fair value can whipsaw your P&L and eliminate the very stability they were meant to deliver. Hedge accounting under IFRS 9 or ASC 815 fixes that, aligning your hedges with the items they protect so your earnings reflect the economics, not the volatility. Done in spreadsheets it's slow, difficult and an audit liability. Forge aHedge automates hedge accounting end-to-end — from designation, effectiveness testing, valuation and to accounting journals — mapping them against your chart of accounts to feed the results straight to your ERP or TMS.
Hedge accounting starts before the trade does
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Designate hedge relationships at inception, with contemporaneous, audit-ready documentation
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Capture risk-management objective, strategy, hedged item, hedging instrument and hedge ratio in one place
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Test eligibility against IFRS 9 and ASC 815 criteria before you commit, not at period end
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Ready-made templates for cash flow, fair value and net investment hedges across commodities and FX
Prove effectiveness — every period
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Prospective and retrospective effectiveness testing built in and run on schedule
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Choice of methods — critical-terms match, dollar-offset, regression and the hypothetical-derivative method
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Assess the IFRS 9 economic relationship, credit-risk dominance and hedge-ratio requirements
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Every test, result and assumption stored for audit, with potential breaks flagged before close
From fair value to the right journals
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Independent fair valuation of derivatives under IFRS 13 / ASC 820
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Automatic split of effective and ineffective portions between OCI and P&L
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Cash flow hedge reserve tracked, reclassified and amortised on the correct dates
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GL-ready journals generated and fed to your ERP — no rebuilding the model every month
Audit-ready, disclosure ready
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Full audit trail across designations, tests, valuations and journals — who, what and when
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Disclosure data prepared for IFRS 7 and ASC 815 notes without manual compilation
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De-designation, rebalancing and discontinuation handled and documented correctly
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One controlled system in place of fragile, key-person risk spreadsheet models
What is hedge accounting?
Hedge accounting is an accounting treatment that aligns the timing of gains and losses on a hedging instrument with the item it is hedging, so a company's reported earnings reflect its economic risk management rather than short-term mark-to-market swings. It is governed mainly by IFRS 9 internationally and ASC 815 in the US, and applies to cash flow, fair value and net investment hedges.
Does Forge aHedge support IFRS 9 and ASC 815 hedge accounting?
Yes. The platform supports designation, effectiveness testing, valuation, journals and disclosure data under both IFRS 9 and ASC 815, with fair values determined under IFRS 13 and ASC 820. It is purpose-built for commodity and FX hedges and feeds the resulting entries to your ERP or accounting system.
What effectiveness testing methods does it support?
Forge aHedge runs both prospective and retrospective effectiveness testing using methods including critical-terms match, dollar-offset, regression and the hypothetical-derivative method. For IFRS 9 it assesses the economic relationship, whether credit risk dominates value changes, and whether the hedge ratio reflects the actual quantities hedged. Every test and assumption is stored for audit.
Which types of hedge relationships are supported?
The platform supports cash flow hedges, fair value hedges and net investment hedges across commodity and FX exposures, with documentation templates and the correct accounting treatment for each. It also handles de-designation, rebalancing and discontinuation in line with IFRS 9.
How does it produce journals and disclosure data?
Forge aHedge values each derivative, splits the effective and ineffective portions between OCI and P&L, tracks and reclassifies the cash flow hedge reserve, and generates GL-ready journals that feed straight to your ERP. The same records produce the data needed for IFRS 7 and ASC 815 disclosure notes without manual compilation.
Why use Forge aHedge instead of doing hedge accounting in spreadsheets?
Manual spreadsheet hedge accounting is slow, error-prone, dependent on a few key people and difficult to audit. Forge aHedge enforces documentation and effectiveness testing, keeps a full audit trail, and produces consistent journals and disclosures every period — turning hedge accounting from a month-end risk into a controlled, repeatable, automated process.