The importance of ALM

The crossfire between the International Accounting Standards Board and the European Commission seems to have left corporates bewildered about the implications of IAS 39. Risk talks to leading advisory groups and corporates about the challenges ahead, and what impact the practice is having on the timing and nature of how companies tap the capital markets. By Hann Ho

The pitched battles between the European Commission (EC) and the International Accounting Standards Board (IASB) over hedge accounting principles culminated in only the partial adoption of the controversial hedge accounting rule, IAS 39. This highly contentious outcome has focused the spotlight on how listed firms and banks report their earnings, with corporate treasurers beginning to recognise the importance of asset/liability management (ALM) in achieving their group’s economic objectives