Produce hedge accounting transactions and reports

Trigger: A hedging transaction is executed or a financial reporting period ends requiring valuation.

1. Identify the hedging instrument and the corresponding hedged item
2. Document the formal hedge relationship and risk management objective
3. Perform prospective and retrospective hedge effectiveness testing
4. Record the fair value changes of the hedge and hedged item in the general ledger
5. Calculate and record any hedge ineffectiveness in the income statement
6. Generate hedge accounting disclosures and financial reports

Outcome: Hedging transactions are documented, tested for effectiveness, and accurately reflected in financial and regulatory reports.