Application of hedge accounting in energy companies

Companies trading on energy markets daily deal with derivative contracts. Measuring derivatives may cause the fluctuation of company results not consistent with actual risk management. One way to reconcile risk management with the presentation of trading results in the financial statements is to apply hedge accounting.

This course is aimed at presenting the possibilities of applying hedge accounting within the specific characteristics of the energy market.

Who are the intended participants?

Finance, planning, treasury, or risk management department employees in companies in the energy sector (production and sale of electricity, gas, emission allowances)
Accounting or controlling department employees involved in the preparation of financial statements under Czech regulations and IFRS
Employees involved in the preparation of hedge accounting documents

Programme

Summary of the hedge accounting concept and its application in the energy sector
Application of hedge accounting for energy commodities according to the specific characteristics of the company's business model
Documentation
Hedge effectiveness
Method of updating the effectiveness test, releasing the results of the hedge in the profit and loss account
Accounting recognition and presentation in the accounts

Benefits

During the course, you will:

Get to understand the possibilities and requirements of hedge accounting for electricity, gas, allowances (including spread hedging)
Learn to test effectiveness or prepare hedge accounting documentation on your own
Better grasp the effect from hedging and the impacts of unexpected events (termination of hedges due to transfer to liquid markets, changes in production/consumption, transfer between exchange-traded and OTC contracts)