AUD 3 Internal Control 16 - 5 Operating Cycles - Investing and Financing Cycle Flashcards
Investing and Financing Cycle
Internal Controls
Substantive Procedures
Substantive procedures in the area of derivatives investments should be designed to test management’s assertions with regard to (PERCV):
- Presentation and Disclosure
- Existence
- Rights and Obligations
- Completeness
- Valuation
• Presentation and Disclosure
– This will involve
- reading disclosures to make certain they are in compliance with GAAP;
- determining if securities have been pledged as collateral for indebtedness through inquiries and inspection of documents; and
- determining that investments are appropriately classified through inquiries of management.
• Existence
– This may involve the
- inspection of securities on hand;
- confirmations with brokers or other third parties either holding securities or who may be counter-parties;
- reviewing documents; and,
- when appropriate, inspecting documentation of settlement or realization.
• Rights and Obligations
– This may involve the review of documents and confirmations with counter parties.
• Completeness
– This may involve
- review of minutes of the board of directors or others responsible for governance;
- tests of subsequent transactions for evidence of realization or settlement;
- confirmations with counter parties, financial institutions, brokers, and others; and
- evaluating beginning amounts for disposition of inclusion in ending amounts.
• Valuation:
o For valuation based on cost:
▪ Inspection of documentation
▪ Confirmation
o For valuation based on financial results of investee:
▪ Obtaining audit evidence supporting investee’s results
▪ Reading available financial statements of investee
o For valuation based on fair value:
▪ Obtaining quoted market prices on exchanges when available
▪ Obtaining quoted market prices from broker-dealers for unlisted securities
▪ Obtaining estimates, including those using models like Black-Scholes
Investing and Financing Cycle
Internal Controls
Substantive Procedures
Substantive procedures in the area of derivatives investments should be designed to test management’s assertions with regard to (PERCV):
- Presentation and Disclosure
- Existence
- Rights and Obligations
- Completeness
- Valuation
• Presentation and Disclosure
– This will involve
- reading disclosures to make certain they are in compliance with GAAP;
- determining if securities have been pledged as collateral for indebtedness through inquiries and inspection of documents; and
- determining that investments are appropriately classified through inquiries of management.
• Existence
– This may involve the
- inspection of securities on hand;
- confirmations with brokers or other third parties either holding securities or who may be counter-parties;
- reviewing documents; and,
- when appropriate, inspecting documentation of settlement or realization.
• Rights and Obligations
– This may involve the review of documents and confirmations with counter parties.
• Completeness
– This may involve
- review of minutes of the board of directors or others responsible for governance;
- tests of subsequent transactions for evidence of realization or settlement;
- confirmations with counter parties, financial institutions, brokers, and others; and
- evaluating beginning amounts for disposition of inclusion in ending amounts.
• Valuation:
o For valuation based on cost:
▪ Inspection of documentation
▪ Confirmation
o For valuation based on financial results of investee:
▪ Obtaining audit evidence supporting investee’s results
▪ Reading available financial statements of investee
o For valuation based on fair value:
▪ Obtaining quoted market prices on exchanges when available
▪ Obtaining quoted market prices from broker-dealers for unlisted securities
▪ Obtaining estimates, including those using models like Black-Scholes
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
An e____y uses derivatives as hedges to protect itself against various risks
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks
Investing and Financing Cycle
An entity uses der______es as hedges to protect itself against various risks
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks
Investing and Financing Cycle
An entity uses derivatives as h___es to protect itself against various risks
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks
Investing and Financing Cycle
An entity uses derivatives as hedges to pro____ itself against various risks
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various r___s that may be inherent in the assets or liabilities they hold,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be in_______ in the assets or liabilities they hold,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the a____s or liabilities they hold,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or l______ies they hold,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they h___, in anticipated transactions,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in an_______ed transactions,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions,
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated tra________s, or other aspects of their business.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other a_____s of their business.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their b______ss.
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The pur____ of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
The purpose of the he___ is to shift the risk to a counter-party.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
The purpose of the hedge is to sh___ the risk to a counter-party.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
The purpose of the hedge is to shift the r___ to a counter-party.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a co_____-party.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as h____s to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the h____ is to shift the risk to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various r___s that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the r___ to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An e____y with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a f__ed rate receivable
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate re________ may be concerned that
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be con___ed that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fl________ns in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in in______ rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will af____ its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its f___ value.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value. e.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair va___.
They might enter into an interest rate swap
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might en___ into an interest rate swap
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an in_______ rate swap
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate s___ in which they will pay out interest at a fixed rate,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will p__ out interest at a fixed rate,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay o__ interest at a fixed rate,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a f__ed rate, to offset the interest received,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed r___, to offset the interest received,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to of____ the interest received,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received,
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the in_______ received, and receive interest
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest re______d, and receive interest
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and re_____ interest from the counter-party at a variable rate.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive in_______ from the counter-party at a variable rate.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the c_______-party at a variable rate.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a va______ rate.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a re\_\_\_\_, they will always be paying the market rate of interest
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will al\_\_\_s be paying the market rate of interest
Investing and Financing Cycle
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be p\_\_ing the market rate of interest
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the m\_\_\_\_\_ rate of interest
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of int\_\_\_\_\_\_\_ and changes in the fair value of the note
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and ch\_\_\_es in the fair value of the note
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the f\_\_\_ value of the note will be offset
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the n\_\_\_ will be offset
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be o\_\_\_\_t by changes in the fair value of the derivative
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by ch\_\_\_\_s in the fair value of the derivative
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the f\_\_\_ value of the derivative
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the de\_\_\_\_\_\_ used as a hedge.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a h\_\_\_e.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be con\_\_\_\_\_\_ed a fair value hedge.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair va\_\_\_ hedge.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value h\_\_\_e.
Investing and Financing Cycle
Fair Value Hedge
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
F___ Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a f__ed r___ receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be con_____d that flu________s in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in in______ r___s will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might en___ into an interest rate s___ in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will p__ out interest at a f___d rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to of___t the interest rec___ed, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and re______ interest from the counter-party at a va_____e rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the ma\_\_\_t r\_\_\_ of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and ch\_\_\_es in the f\_\_\_ value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be of\_\_\_t by ch\_\_\_es in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the de\_\_\_\_\_\_\_ used as a h\_\_\_e. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Fair Value Hedge
• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.
They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counter-party at a variable rate.
o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge. o This would be considered a fair value hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counter-party at a fixed rate.
o As a result, regardless of changes in the market interest rate, the entity will receive a steady and predictable stream of interest cash inflows. o This would be considered a cash flow hedge.
Investing and Financing Cycle
An entity uses derivatives as hedges to protect itself against various risks that may be inherent in the assets or liabilities they hold, in anticipated transactions, or other aspects of their business.
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counter-party at a fixed rate.
o As a result, regardless of changes in the market interest rate, the entity will receive a steady and predictable stream of interest cash inflows. o This would be considered a cash flow hedge.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Cash Flow Hedge
• An e____y with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
The purpose of the hedge is to shift the risk to a counter-party.
For example:
1) Fair Value Hedge
2) Cash Flow Hedge
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a va_____ rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable r___ receivable
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate rec_______ may be concerned about the uncertainty
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be con____ed about the uncertainty
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the un_______y of future cash inflows
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of fu____ cash inflows
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future c__h inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash in____s due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to flu_______s in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the in______ rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest r___.
They might enter into an interest rate swap
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might e_____ into an interest rate swap
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate s___ in which they will pay out interest at a variable rate,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will p__ out interest at a variable rate,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out in______ at a variable rate,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a va______ rate, to offset the interest received,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to off___ the interest received,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the in_______ received,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received,
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest re____ed, and receive interest
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and re_____ interest from the counter-party at a fixed rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counter-party at a fixed rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive int______ from the counter-party at a fixed rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counter-party at a fixed rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the co_____-party at a fixed rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counter-party at a fixed rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counter-party at a f__ed rate.
Investing and Financing Cycle
Cash Flow Hedge
• An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.
They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counter-party at a fixed rate.
