Table of Contents
Manage early de-designation of cash flow hedges


Manage early de-designation of cash flow hedges

First, if you want to use a custom spot rate for de-designation you must enter that in ChathamDirect.

  • Navigate to Operations > Custom FX Spot Rates and select the de-designation date on the calendar
  • Click the pencil icon in the top right corner of the page to unlock the rate fields for editing:

Note: the date chosen for this rate should be the last day for which your trades have a cash flow designation, the date for which there will be a transition journal entry.


  • Enter the custom spot rate into the Valuation field for the relevant currency pair(s) to be de-designated
  • Click the green Save button on the top right:


Next, you will proceed to de-designate the cash flow trade and create a new mark-to-market treatment for all trades.

  • Navigate to Accounting > Accounting Dashboard
  • Search for the trades which need to be de-designated by entering reference numbers in the search bar
  • Check the box to the left of all trades to be de-designated:


  • Click the green Take Action button, then click Apply Strategy
  • On the Apply Strategy workflow page, click Proceed to Select Strategy on the second card, labeled DE-DESIGNATION/REDESIGNATION


  • The next screen will then display a list of all accounting strategies in your system, where you should find at least one mark-to-market option. Click the Select Strategy button on that option:

 

  • Once you click to select the mark-to-market strategy, you can then set the date for which the cash flow treatment will end, which will be the date that the mark-to-market treatment begins.
  • You can click the downward arrow icon to populate the date onto all trades, if you are de-designating multiple trades.
  • Once you set the date(s) to de-designate, click the green Apply Strategy button to save changes:

  • Note: This is the date to be used as the new treatment start date and previous treatment end date.

When the process completes, you will be taken to a status page which displays the re-designation and inception regression results. If there are any errors for the processing, you can contact your Chatham representative to assist with understanding what occurred.


From the status summary view, you can click the option review the entries or tests, or you can click to see trade details. From the details view, you can drill in to manage the treatment, which will show a timeline of the Cash Flow and Mark to Market treatments. Clicking on the Cash Flow treatment will allow you to spot check that your treatment end date is correct, as well as to confirm that your OCI release is set up properly on the P&L method card.


At this point, your trades have been de-designated and are ready for accounting entries to be run. You can choose to manually run the entries on those specific trades, or you can allow them to be included in running your next period end accounting entries. For further guidance on running accounting entries, please refer to the User Guide named Run Accounting for Period End.