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ProHEAT

Recorded Webinar: Hedge Accounting with HOC's ProHEAT

ProHEAT is a web based Financial Accounting Standard (FAS) 133 /International Accounting Standards (IAS) 39 Hedge Accounting System for energy companies.

As a result of the complexity in addressing FAS/IAS requirements, ProHEAT is the software solution to assist energy companies in meeting FAS/IAS requirements and properly implement Hedge Accounting. "ProHEAT empowers energy companies to document, substantiate hedges and administer earnings volatility".

ProHEAT is built for energy companies, was designed with energy companies and is utilized by energy market participants.

Effectiveness Calculations


		•	Prospective effectiveness is measured using regression analysis. Many regressions per hedge can be defined, each with different parameters.
		•	Ineffectiveness is computed using the dollar offset method. Calculations include adjustments for liquidity (spreads) and for shaping hedging instrument prices.
		•	Theoretical prices for illiquid markets (e.g. power plants) are derived when needed by the ineffectiveness calculation.
		•	Monthly trade by trade comparison of ineffectiveness is available to quickly determine new sources of ineffectiveness.
		•	Historical effectiveness results are available.

Documentation


		•	All hedge documentation required by FAS 133/IAS 39 is maintained.
		•	Effectiveness results as well as comprehensive detailed calculations are available in Excel. Auditor friendly results are available in PDF format.

Accounting and Reporting


		•	Post the effective portion of hedges to equity and the ineffective portion to earnings.
		•	Produces scheduled roll-outs for ineffectiveness and equity.
		•	Entries are mapped to user-defined General Ledger accounts
		•	All reports are exported to excel

De-designation of hedges


		•	Specific trades or entire hedging strategies can be dedesignated and redesignated at any time.
		•	Back testing monitors over hedged conditions based on actual results, while forward testing monitors over hedged conditions based on forecasts.

Data Interfaces


		•	Trades and prices can be uploaded from Energy Trading Risk Management system (ETRM).
		•	Trades and prices can be inspected, modified, and re-imported before the calculations are run.

What If Scenarios


		•	Users are allowed to create test hedges, change any calculation parameter and view results. This provides a powerful method of testing scenarios.

Security


		•	Role based user profiles enables segregation of duties between different users.

Audit Capabilities


		•	Each field could be examined to see what changes took place, when and by whom.

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Key Features

•	Ineffectiveness: Adjustments for Shaping and Liquidity
•	Documentation
•	User Defined General Ledger Accounts
•	Export Detailed Calculations to Excel
•	ETRM Agnostic
•	Powerful 'What-If' Scenarios to Create Test Hedges
•	Field Level Audit
•	Web Based
•	Oracle Database
	...and more