"Using the Wal-Mart of interest rate swaps," says Wal-Mart to use interest rate swaps to hedge the fair value of its fixed rate against changes in interest rates. This event gives students a foundation for understanding the use and consideration of more complex derivatives. Specific issues include: (1) the financial implications of the application of hedge accounting (2) the motivation for using derivatives, including the potential role of accounting standards, and (3) the extent to which the financial statements and MD & disclosures are sufficiently informative about the risks associated with financial instruments . "Hide
by Michael D. Kimbrough, Michael Faulkender, Nicole Thorne Jenkins, Rachel Gordon Source: Harvard Business School 22 pages. Publication Date: January 17, 2008. Prod. #: 108038-PDF-ENG
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