FIRST eliminates the uncertainty that surrounds many corporate hedge accounting programs by creating transparency of financial data and hedge documentation.

The system facilitates full compliance with accounting standards relating to foreign exchange, commodities and interest rate derivatives by offering a streamlined and flexible hedging workflow.

• »Link hedges with the underlying exposure and documentation in dedicated “Hedge Relationships”
• »Identify a hedge type at inception and track its history through maturit
• »Fair value mark-to-market exposures and derivatives
• »Automatically calculate entries to OCI or earnings based upon effectiveness
• »Upload external documentation to Hedge Relationships and provide summarized worksheets for audit compliance
• »Utilize hypothetical derivatives to test and measure hedge effectiveness
• »Assess the effectiveness of hedges using long-haul methods – regression analysis and dollar offset

FXpress Corporation constantly monitors accounting standards and provides enhancements to support interpretations such as FAS 133R, 138, 157 and 159, IAS 39 and CICA 3865. Best practices are defined and implemented within FIRST based on input from accounting firms, consultants and clients.

Define rules for hedge accounting:	Define regression methodologies:
Cumulative Dollar Offset	Regression statistics: r 2, Slope, p-Value, t-Statistic and Significance F
Period to Period Dollar Offset	Data periods (Length of time)
Regression Analysis	Frequency of data points (Daily, Weekly, Monthly)
Hypothetical Derivative	Determine minimum number of data points to carry out a successful regression analysis
Assumed / Shortcut	Calculation methods include: price, Δprice, fair value, Δfair value

FASB issued FAS 157 to promote a more consistent, accurate and transparent measurement of the fair value of financial instruments.

It clarifies that risk of non-performance, or credit-worthiness, should be included in the computation of fair value. FXpress’ FIRST Treasury Solution provides companies with the flexibility in determining how FAS 157 should be applied without impacting pre-157 results.

• »Define and Import Credit curves for the company and its counterparties – Risk managers can define and measure the credit adjustments, import the data and link them to the company and their counterparties.
• »Apply credit based on asset or liability position – FIRST determines whether a position is an asset or liability at the time of valuation and applies the credit of the appropriate entity to the fair value calculations.
• »Capture Levels of Input reliability – Risk managers can indicate the level of transparency of the market data inputs used in the calculation and indicate the significance they have on the end result.
• »Disclosure Reports for Summary Level of Input and Detailed Level 3 Fair Values – FIRST categorizes the fair value as being Level 1, 2 or 3 and provides disclosure reports which show a summary of the fair values across the levels of input and details on the Level 3 fair values as outlined in the statement.
• »Apply FAS 157 selectively – apply the new rules to only selected transactions and hedges.
• »FAS 157 Adoption Date - FIRST captures the adoption date of FAS 157 so that historical results can be replicated without being impacted by credit risk.