DETERMINANTS OF HEDGE ACCOUNTING AND IMPACT OF HEDGE ACCOUNTING ON EARNINGS VOLATILITY

Corporate Incentives for Hedging and Hedge Accounting

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1 Corporate Risk Management and Hedge Accounting

Motivated by the debate about the economic consequences of mandatory adoption of International Financial Reporting Standards (IFRS), this study investigates the effect of hedge accounting under IFRS on corporate risk management. Using a sample of large UK non-financial firms from 2003 to 2008, we show that the implementation of the new standards reduces the level of asymmetric information faced...

Hedge Accounting and its influence on financial hedging: Evidence from Germany and Switzerland

Based on survey evidence from Germany and Switzerland we analyse the application of hedge accounting according to IAS 39 and its influence on the hedging behaviour of nonfinancial corporations. We find that about two thirds of the companies apply hedge accounting. Larger companies and companies that frequently use derivatives for hedging purposes are more likely to apply hedge accounting. The l...

Closure of Hedge-automata Languages by Hedge Rewriting Closure of Hedge-automata Languages by Hedge Rewriting

We consider rewriting systems for unranked ordered terms, i.e. trees where the number of successors of a node is not determined by its label, and is not a priori bounded. The rewriting systems are defined such that variables in the rewrite rules can be substituted by hedges (sequences of terms) instead of just terms. Consequently, this notion of rewriting subsumes both standard term rewriting a...

Hedge Commitments and Agency Costs of Debt: Evidence from Interest Rate Protection Covenants and Accounting Conservatism