For 20 years, Afi has been providing its clients with a comprehensive advisory service on the management of the financial risks involved
in investment and funding processes. Among other things, this service includes the following:
- Detection of financial risks (interest rate, exchange rate, price changes in shares, stock market indices, etc.) for the different assets and liabilities.
- Quantification of financial risks: impact in monetary terms of potential scenarios for the financial variables. Analysis of correlations, diversification effects and natural hedges.
- Diagnosis of hedging requirements: recommendations for action.
- Selection of the optimal hedging instrument and dealing with financial institutions and auditors.
This service is designed, therefore, to provide a comprehensive solution to the management of the financial risks inherent in any process of investment/funding, and ranges from its origin (expectations for economic and financial variables) to negotiating the terms of the hedging instrument with the financial institution. In this regard, Afi has accumulated a great deal of experience in advising on the application of hedge accounting norms to derivatives
, for the purpose of adjusting the impact of hedging derivatives on the P&L and capital accounts. The services provided by Afi in this area include:
- Documentation of accounting hedges : hedging policy manuals and development of individual hedging factsheets.
- Preparation of effectiveness tests.
- Calculation of fair value of risks hedged and of hedging derivatives.
- Preparation of information for the Annual Accounts.
- General advice in relation to hedge accounting.
Clients of this service are mainly Spanish non-financial firms, most of them listed on the stock exchange.