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Commodity Players Win in Proposed Hedge Accounting Rules

The FASB's proposal to tweak hedge-accounting rules stands to benefit commodity traders and customers who want to qualify for the benefits of this accounting treatment.

16:26 ET - The FASB's proposal to tweak hedge-accounting rules stands to benefit commodity traders and customers who want to qualify for the benefits of this accounting treatment. Commodity market participants weren't previously allowed to break-out the risks in their transactions--like the risk of wheat price volatility in a flour sales contract. The new rules will allow such segmenting to qualify for hedge accounting. The proposal "would allow ADM [Archer-Daniels-Midland] increased ability to adopt accounting models that reflect the way risk is actually managed," said John Stott, corporate controller and principal accounting officer at ADM, in a letter to FASB. (tatyana.shumsky@wsj.com)

(END) Dow Jones Newswires

March 27, 2017 16:26 ET (20:26 GMT)

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