Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwokerto, Central Java, Indonesia

Research Article

Applicability Evaluation of Hedge Accounting Implementation under PSAK 71 (Case Study at PT XYZ)

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  • @INPROCEEDINGS{10.4108/eai.10-8-2022.2320919,
        author={Pebriansyah  Pebriansyah and Aria Farah Mita},
        title={Applicability Evaluation of Hedge Accounting Implementation under PSAK 71 (Case Study at PT XYZ)},
        proceedings={Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwokerto, Central Java, Indonesia},
        publisher={EAI},
        proceedings_a={ICBAE},
        year={2022},
        month={8},
        keywords={hedging hedge accounting derivative risk management profit and loss fluctuation},
        doi={10.4108/eai.10-8-2022.2320919}
    }
    
  • Pebriansyah Pebriansyah
    Aria Farah Mita
    Year: 2022
    Applicability Evaluation of Hedge Accounting Implementation under PSAK 71 (Case Study at PT XYZ)
    ICBAE
    EAI
    DOI: 10.4108/eai.10-8-2022.2320919
Pebriansyah Pebriansyah1,*, Aria Farah Mita1
  • 1: Universitas Indonesia
*Contact email: pebriansyah.arpah@gmail.com

Abstract

The most common risk faced by companies is financial risk. Financial risk can come from fluctuations in currency exchange rates, interest rates, commodity prices, or stock prices in the future. The best option in dealing with these risks is to carry out hedging transactions while applying hedge accounting. In addition to the benefits of risk mitigation, profit will be presented more stable. However, implementing hedge accounting comes at the cost of additional effort to document, measure effectiveness, and perform additional journal entries that tend to be difficult for companies. This research was conducted to study and answer the question of how the applicability of hedge accounting at. PT XYZ based on PSAK 71. This study used a qualitative method with case studies at PT XYZ. Qualitative data is processed through descriptive methods. Interview questions were addressed to officials and staff who carry out and understand hedging transactions assigned to separate Division, namely the Treasury Business Division, Risk Management Division, Accounting Division, and Operational Division. The results of the study illustrate that the main thing that needs to be prepared by PT XYZ is the procedure for documenting the accounting hedge relationship. In addition, the research results provide an overview of what PT XYZ needs to prepare such as updating accounting policies and making guidelines.