Kiodex focuses on accounting transparency for corporations

The module offers a platform for companies who must provide accurate reporting of derivatives usage as required by the United States Financial Accounting Standards Board's FAS 133 standard. FAS 133 requires firms to report gains and losses on derivatives transactions in earnings, unless the trades are specifically designated as hedges.

The new module provides key reports and accounting entries necessary for FAS 133 compliance from trade entry to general ledger. Users can also generate reports on all their hedges, hedged items and hedge relationships. The module allows full mark-to-market accounting using independent market data, and includes tools for matching trades to underlying exposures and effectiveness testing for hedge accounting, said Martin Chavez, chief executive of Kiodex.

The launch follows a beta programme that included independent testing by a variety of companies in energy-intensive industries, including Devon Energy Corporation, which has now signed as a full customer.

Designing treasury software that complies with FAS 133 requirements has proved a big challenge for vendors, with a number of corporates voicing concerns about the functionality of such systems. “The features are crucial, but they must be embedded in a platform,” said Chavez.

A feature discussing FAS 133 treasury software appears in the August issue of Risk.