Hedge accounting under IFRS 9: from documentation to automated entries

Nomentia's Treasury and Hedge Accounting brings treasury accounting and cash flow hedge accounting into one auditable workflow. For hedge accounting, the focus is the full cash flow hedge lifecycle under IFRS 9: from designation and documentation through period-end accounting events to de-designation and final settlement.

Generate the formal hedge documentation at inception

At the start of a hedge relationship, Nomentia can generate the formal hedge documentation required for the supported cash flow hedge process.

The documentation covers the hedging instrument, hedged item, hedged risk, hedge ratio and effectiveness methodology. This gives treasury and accounting a structured record from the beginning rather than relying on a separate document assembled after the trade has already been executed.

Support effectiveness assessment in the same workflow

Effectiveness is part of the hedge lifecycle, not a separate reporting exercise.

Nomentia supports effectiveness assessment as part of the hedge-accounting process, keeping the methodology and the resulting accounting treatment connected to the underlying relationship. Where the effectiveness is reassessed or rebalancing occurs, those events can be reflected in the documentation and accounting flow.

Automate the accounting entries created by hedge events

Nomentia generates accounting entries for treasury transactions based on predefined accounting rules.

Where hedge accounting applies, the system also creates the relevant entries for the effective portion in OCI, ineffectiveness in profit or loss and rebalancing. Across the lifecycle, this reduces the need to calculate and transfer the same accounting logic manually at each reporting period.

The objective is repeatability: when the same defined treasury event occurs, the accounting treatment should follow the configured rule.

Cover FX and interest-rate cash flow hedges

The supported hedging instruments include FX forwards, FX swaps and single-currency interest-rate swaps.

Eligible hedged items include highly probable forecast transactions in foreign currency, FX-denominated loans and deposits, and floating-rate financial instruments. Groups of items forming a net position can also qualify where the applicable hedge-accounting criteria are met.

This allows the hedge-accounting workflow to cover both foreign-exchange risk and interest-rate risk within the defined product scope.

Connect treasury accounting with hedge accounting

The full product, Nomentia Treasury and Hedge Accounting, covers more than hedge accounting alone.

Treasury accounting supports relevant financial transactions and the accounting entries associated with them. Hedge accounting adds the specialist cash flow hedge lifecycle, documentation, effectiveness assessment and accounting treatment required for qualifying relationships.

Keeping these areas together helps treasury and accounting work from the same financial events rather than maintaining a separate accounting process around the treasury system.

Make period-end a controlled review

Period-end still requires expertise. Treasury and accounting teams need to review the hedge relationships, understand exceptions and ensure the accounting treatment remains appropriate.

The difference is what they are reviewing. Instead of first collecting documentation, recalculating entries and reconstructing the lifecycle, the process can present the relationship and its accounting history in one auditable workflow.

That shifts effort from evidence assembly toward review and exception handling.

Create a clearer audit trail from designation to settlement

Hedge accounting needs to be explainable after the fact.

A reviewer should be able to understand how the relationship was designated, which methodology applied, what changed, how effectiveness was assessed and which entries were generated through the lifecycle.

By keeping those events connected and in a single system, Nomentia's Treasury and Hedge Accounting provides a more structured basis for internal controls and audit evidence than a process spread across separate files.

Use the system for what should be repeatable, keep judgement with specialists

Automating documentation and postings does not remove the professional judgement required for hedge accounting.

Treasury still needs to identify the exposure and choose the hedging strategy. Accounting policy still needs to determine whether a relationship qualifies and how the standards apply. The system supports the repeatable workflow around those decisions.

That is the practical role of hedge-accounting automation: reduce manual process work while keeping the specialist judgement visible and accountable.