[Verse 1] When markets swing like pendulums, your profits hang in limbo Fair value hedges shield the carrying amount, like armor for your kimbo Mark-to-market fluctuations threaten what you've carefully built But derivatives can neutralize the damage, wash away the guilt [Chorus] Fair-Cash-Net, the trinity of hedge protection FVH locks the book value, stops the wild deflection CFH smooths the future flows through other comprehensive NIH guards your foreign subs from currency expensive Highly effective, eighty to one-twenty-five Keep your hedging relationships mathematically alive [Verse 2] Cash flow hedges capture volatility before it strikes your income Variable interest payments, forecast sales that haven't yet become Park the gains inside OCI, release them when exposure hits Perfect timing synchronization, like financial counterfits [Chorus] Fair-Cash-Net, the trinity of hedge protection FVH locks the book value, stops the wild deflection CFH smooths the future flows through other comprehensive NIH guards your foreign subs from currency expensive Highly effective, eighty to one-twenty-five Keep your hedging relationships mathematically alive [Bridge] Prospective testing at inception, check the economic rationale Retrospective every quarter, prove the offset still walks tall Credit risk and hedge components, separate the noise from signal Document your hedging strategy, make effectiveness less fickle [Verse 3] Net investment hedges wrap your subsidiaries in foreign lands Translation differences neutralized by derivatives in your hands Functional currency fluctuations balanced by your chosen tool Reserve recycling on disposal, follow every hedging rule [Chorus] Fair-Cash-Net, the trinity of hedge protection FVH locks the book value, stops the wild deflection CFH smooths the future flows through other comprehensive NIH guards your foreign subs from currency expensive Highly effective, eighty to one-twenty-five Keep your hedging relationships mathematically alive [Outro] Discontinue when ineffective, reclassify your gains IFRS nine mechanics flowing through your accounting veins
← Expected Credit Loss Model - IFRS 9 | Fair Value Measurement - IFRS 13 →