[Verse 1] When market risks threaten your bottom line IFRS Nine shows the way to align Your hedging strategy with accounting rules Three relationships are your primary tools Fair value hedges when assets fluctuate Cash flow hedges for future cash you anticipate Net investment when foreign subs are at stake Choose your weapon for the risk you'll break [Chorus] Fair Cash Net, remember the set Effectiveness testing, don't you forget Eighty to one twenty five, the range to survive Document your strategy to keep hedge alive Fair Cash Net, the trio you bet Qualify, measure, then don't regret Mark to market or defer the gain Hedge accounting eases the pain [Verse 2] Fair value hedges tackle existing exposure Interest rate swaps bring rate composure When your fixed rate bond meets floating rate derivative Mark both to market, let gains be comparative The hedge item and the hedging tool Move together by the effectiveness rule P and L impact gets neutralized When your hedging relationship's optimized [Chorus] Fair Cash Net, remember the set Effectiveness testing, don't you forget Eighty to one twenty five, the range to survive Document your strategy to keep hedge alive Fair Cash Net, the trio you bet Qualify, measure, then don't regret Mark to market or defer the gain Hedge accounting eases the pain [Verse 3] Cash flow hedges smooth future volatility Forecast transactions need probability Send derivative gains to OCI first Until the hedged transaction is dispersed When the forecast sale finally comes to pass Move those deferred gains from equity class Reclassify to match the underlying Perfect timing, no more underlying [Bridge] Prospective testing looks ahead Retrospective confirms what's been said If effectiveness falls outside the band Discontinue hedging, take your stand Document at inception, that's the key Risk management strategy for all to see [Chorus] Fair Cash Net, remember the set Effectiveness testing, don't you forget Eighty to one twenty five, the range to survive Document your strategy to keep hedge alive Fair Cash Net, the trio you bet Qualify, measure, then don't regret Mark to market or defer the gain Hedge accounting eases the pain [Outro] Net investment in foreign operations Currency hedges across all nations Translate gains through OCI flow IFRS Nine helps your knowledge grow
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