Oracle Launches Financial Services Hedge Management and IFRS Valuations

Oracle’s Financial Services Hedge Management and IFRS Valuations solution is now available to help financial institutions easily comply with regulatory requirements for International Financial Reporting Standards (IFRS).

New IFRS requirements for documentation and transparency make manual and siloed hedge accounting and valuation processes impractical. Given market volatility, hedge accounting must be a fully automated process. Emerging regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act in the US, Basel III and the adoption of standards defined in IFRS, mandate tighter alignment between the controller, treasury and risk operations.

As part of the Oracle Financial Services Analytical Applications suite that shares a common account-level relational data model and application architecture, the new solution facilitates such alignment. The vendor says that the new solution helps financial institutions:

  • Address regulatory requirements for IFRS, by classifying and computing the fair valuation of financial instruments, calculating effective interest rate, and computing and monitoring the effectiveness of hedging relationships.
  • Create and tune hedging strategies for optimal capital utilisation. Financial services institutions are able to monitor retrospective hedge effectiveness, apply what-if and stress scenarios to test prospective hedge effectiveness and readily handle hedge de-recognition processes.
  • Leverage a common computation engine for consistent valuations between treasury and accounting, and use common data quality and reconciliation processes across finance and risk applications.


Related reading