Define the type of hedge that northwest would need

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Reference no: EM132075075

Requirements:

Define the type of hedge that Northwest would need to designate. In other words, are these cash flow hedges, fair value hedges, or net investment hedges?
Access the FASB's Accounting Standards Codification (ASC) and identify the criteria that Northwest would need to meet and document to ensure the interest rate swaps achieve hedge accounting treatment, and the criteria on which Northwest should base their assessment of the hedges' effectiveness. Provide the relevant paragraph numbers for each of these sets of criteria and a general description of the requirements. This general description should be in your own words (i.e., do not copy and paste the guidance from the ASC). Your description of the criteria used to assess hedge effectiveness need not be exhaustive, rather it should focus on the guidance in the ASC that would be relevant to this case.
Determine the appropriate journal entries to account for the two hedging relationships for the year ended December 31, 2015. Assume that both hedging relationships are perfectly effective. Relevant information is as follows:

Date	3 month USD LIBOR	Swap 1 Fair Value	Swap 2 Fair Value
March 31, 2015	1.00% (reset 12/31)	($150,000)	N/A
June 30, 2015	1.35% (reset 3/31)	$225,000	N/A
September 30, 2015	1.75% (reset 6/30)	$175,000	$430,000
December 31,2015	1.60% (reset 9/30)	$210,000	$475,000

You should approach this project as if it was a report requested by a manager or a partner that you are working for. Their time is expensive and you need to provide them all of the relevant information in a clear and precise manner. So, clarity and precision matter, as does conciseness.

Attachment:- Accounts Hedging.rar

Reference no: EM132075075

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