Oanda corporation Revision 5

Forex Hedge Accounting Treatment  

OANDA’s FXConsulting 

 

for Corporations

   

32 

 

Appendix B – What to Hedge? 

Data Capture: The Key to Determining How Much to Hedge 

The key to using forex hedging to effectively manage your foreign currency risk is to capture accurate 

forex exposure information. The collection and evaluation of data on foreign currency transactions can 

be broken down into three areas: 

1.  Recorded assets and liabilities on the balance sheet 

2.  Firm commitments (binding third-party contracts) 

3.  Highly probable future (forecasted) transactions 

Once you have captured this data, you can determine the hedging ratio on your future foreign 

exposures.