Variance offers independent valuation services of financial products. Whether it is an interest rate, commodities or foreign exchange hedging product, the complexity of valuing a hedge depends on many factors such as type of financial instrument, access to market data, understanding pricing models, technical expertise, etc.
VarianceÔÇÖs access to global market information, and analytical and financial modeling capabilities, are combined to provide independent valuation on financial transactions for which there is less transparency, less liquidity, or are dealt outside of organized markets.
Our independent hedge valuation services are used for both financial and regulatory accounting purposes including for hedge accounting purposes. Under IAS39, hedges are marked-to-market with changes in valuation be taken to the profit and loss (P&L) account. Therefore, valuation of non-qualifying hedges can unnecessarily add to the volatility of the profit and loss account.
The following are examples of situations in which Variance independent hedge valuation services can be useful:
- An auditing company needs to value complex financial transactions for a client
- A company requires to retrospectively estimate the bank margin on past financial transactions
- An investment fund has several structured products for which price discovery is not available