Acct 540 Project Week 7
As a consultant for Thomas Foods and it is my job to develop hedging strategy to mitigate the risks associated with any unexpected increase in price they would have to pay farmers for their harvested crops. It is important to note that risk is an unavoidable fact of business life. Also, the strategies developed to mitigate risk can often determine the success or failure of a business. There are several mechanisms that are used for such transactions that can involve futures contracts, short sells and rate swaps, among other more exotic positions. There is specific set of guidelines that needed to be set as a consultant. My first initial thought will be the risk to be hedged; that is interest rate and commodity price
…show more content…
For any chosen hedging program, we should be aware of the accounting standards that will govern reporting of those transactions. The summary under FASB 133 says that at the inception of the hedge, an entity that elects to apply hedge accounting is required to establish the method it will use for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge. These methods must be consistent with the entity 's approach to managing risk.
For interest rate hedging strategy, swaps are used to hedge. And most importantly, interest rate swaps are an agreement between two counterparties exchanging one stream of future interest payments for another. Interest rate swaps can exchange a fixed payment for a floating payment or vice versa. We can also hedge against commodity price risk where this involves purchase of a futures contract, that guarantee a particular price at a certain point in time. In this case, the price is guaranteed and no unexpected loss can occur. Also no gain based on favorable price changes can occur as well. We can also hedge against commodity price risk where this involves purchase of a futures contract, that guarantee a particular price at a certain point in time. In this case, the price is guaranteed and no unexpected loss can occur. Also no gain based on favorable price changes can occur as well. Hedging against investment risk means strategically using instruments in the market to
Fair value measurement is one of the models which provide guidance on how entities should determine the fair value of financial instruments for reporting purposes. This paper discusses the Financial Accounting Standards Board (FASB) Exposure Draft issued on December 3, 2015 which proposed amendments to Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements. The paper analyzes some of the key points of the exposure draft, among other things, the history and development the concept of fair value management, the necessity of the amendments to the topic, the provisions and conceptual framework of the fair value measurement. The paper also compares and contrasts the FASB Topic 820 formerly known as to the International Accounting Standards (ISA) No. 13 of the International Financial Reporting (IFRS). Finally, the paper concludes on the response to the exposure draft.
Based on the 1988 Supreme Court case of Corn Product Refining Co. v. Commissioner (350 U.S. 46; 76 S.Ct. 20; 100 L.Ed. 29), hedging transactions were determined to be used to support business practices of certain commodities. Such hedging transactions are normal for businesses engaged in commodity sales such as coal or corn to protect against market
Charles Jackson, Chief Information Officer (CIO) at McConnell Spice was recently tasked by the Board of Directors to find qualified knowledge sharing companies that would increase productivity, permit for better time utilization, and allow the company to maintain global acquaintances. Jackson’s main priorities entail determining which company would be suitable for the position, and impressing the board. Charles has to attain all needed resources to surpass the Board of Directors expectations.
A Certified Clinical Nutritionist is someone who counsels clients on how to either maintain or create healthy diets and ultimately a healthy lifestyle. A bachelor degree, certifications and many hours of internship are required to become a Certified Clinical Nutritionist. Becoming a CCN does not only require an interest and a degree in Nutrition Science. To be a successful professional entails much more. This research will determine the specialized knowledge, skills, abilities, personality, and technology competency that will be attributed to the overall success and achievement in the future of a Certified Clinical Nutrition. An outline and overview of the educational requirements as well as, some career goals will be presented. This study will also take a detailed look at how some current issues in the health sciences relate to the nutrition science profession.
I interviewed Mrs. Peggy Curry. She is a department manager of TD funding services Inc., and she is been running on this bank for 10 years. The interview took place on Friday Nov. 11, 2016 in her workplace at TD funding services Inc. located at ( 496 Edinburgh road South, Guelph, Ontario, N1G 4Z1), and that I select this bank due to the fact Named one of the “top 50 Social responsible businesses in Canada” for the fourth consecutive year through MacLean’s magazine, Named one of the “high-quality 50 company residents in Canada” by corporate Knights, and I pick out this person due to the fact she is the branch manager of this bank and she knows plenty about this profession or industry, beside that she is a good friend of mine.
The occupation of a Registered Dietician (RD) can often be mistaken by the occupation of a Nutritionist. Many individuals tend to disregard the fact that both career titles involve particular education procedures, distinct credentials and licensing requirements, different salaries, and unique work environments. The first main difference of an RD and Nutritionist is the schooling involved for both. According to the Academy of Nutrition and Dietetics, “Registered dietitians are required to complete a formal education program that results in at least a baccalaureate degree. This program must be approved by the Dietetics’ Accreditation Council for Education in Nutrition and Dietetics (ACEND) and include a practical component performed in a career-related
Have you ever been confused about what to eat for a health problem or to weight loss/gain? A Registered Dietitian is a person that can help their clients with that situation. Registered Dietitian(RD) is a complex career with numerous different possibilities in the ways to work in this career. In this career, college is needed and it is around 5 years to complete the degree. There is a multitude of duties included in being a dietitian.
Michelle Kitzmiller is the Customer Service Manager at Yara North America. Yara North America is a division of Yara International and is a fertilizer and industrial chemical company. Her team consists of 11 employees in varying roles. The goal of the customer service team is to ensure the sales order process goes smoothly for everyone from order placement to delivery of product. Michelle’s task is to lead her direct reports in a way that allows them to accomplish this goal in the most effective way possible. As a manager who is responsible for scheduling, facilitating, training, and supervision, she would be considered a First-line Manager; however, much of her role as manager also includes responsibilities of a Middle Manager such as strategy implementation and coordination. The skills she utilizes in her job testify to how she is able to accomplish all that her role entails.
Colleen Dillaway is a Sales and Marketing director for Bright House Networks. She has over 15 years of experience managing, public relations, and sales channels. She has crisis-management skills and media relations. She has a history working with ABC, CBS, NBC, and FOX news. Dillaway showed the class commercials for Bright House and explained the approaches that were taken to reach different customers. I will apply the concepts Dillaway used and apply them to our textbook. In chapter 13 Public Relations and Marketing is the main focus. Marketing is the process of researching, creating, refining, and promoting a product or service and distributing that product or service to targeted consumers (pg. 402-3). Public relations are the values-driven management of relationships between an organization and the publics that can affect its success (pg.403). Dillaway had to collect research to better understand how to gain and keep customers. In the process of her research she was also able to better advertise Bright House services as well. For example, Dillaway informed the class how Bright House created a commercial to aim directly at Bakersfield customers in doing this the commercial was filmed here. Chapter 13 also defines advertising as controlled media in an attempt to influence the actions of targeted publics. Going back to the Bakersfield commercial, we can see the that the targeted publics was Bakersfield consumers.
Management’s assessment of risk associated with interest rates is high. Exposure to market risks results primarily from fluctuations in interest rates. Their objective is to enter into derivative instruments to primarily decrease volatility of net earnings and cash flow associated with fluctuations in interest rates. They have financial instruments that are sensitive to changes in interest rate, as well as several outstanding interest rate swap agreements.
When applying hedging strategies, the best way to implement these systems is by dealing
As time went on, and I graduated with my undergrad in Marketing, it became time to move on. Around the same time a position in the marketing department opened at Briggs & Stratton and I made the hard decision to leave a role I was good at, the role I knew inside and out, and venture into the unknown. Interviewing against 6 other people it was no walk in the park. Sitting with the VP of Marketing I was comfortable but yet still nervous about the questions I was going to be asked. All was going well and very typically for an interview until the end. I was directed to his whiteboard. There was a list of our customers: Lowes, Home Depot, Menards, and next to them was a number. The question at hand had to do with grass seed, similar to long and garden equipment but not a market I was entirely familiar with. The numbers next to the customers was their market share, and the question at hand was how to increase Home Depots market share with new homeowners. Feeling extremely inexperienced, I thought for a second on how to answer the question. Was he looking for a technical aspect of numbers? Was he looking for a quick detail of a campaign, and ad idea maybe? Deciding to stop second guessing myself I went with what my gut was telling me to do. I thought about all the suburban housing developments that go up everywhere, what is the one thing they are usually lacking when the house is complete? Grass. Unless it’s a high-end subdivision the home
In order to reduce risk, the company is using two hedging derivatives: forward contracts and put options to sell dollars. The aim of the paper is to determine an appropriate hedging policy which answers two main questions: how much to hedge, and in what proportions of forwards
Generally, under accounting standards (IAS 39 and related U.S. standards), derivative instruments are fair-valued with any unrealized gain or loss included in net income. However, hedge accounting provides some exceptions to this rule.
Hedging can be defined as a risk management mechanism or strategy which is used to prevent the chances of incurring losses which arise as a result of fall in prices commodities or currencies. It is a technique which is majorly used by the investors in protecting their capital against the effects of the economic situations such as inflation whereby the investors invests in the high yield financial instruments or take a position to cushion them against such effects (Investopedia, 2012).