RT Journal Article SR Electronic T1 Hedging Cross-Currency and Interest-Rate Exposures Under FAS 138 JF Special Issues FD Institutional Investor Journals SP 77 OP 79 VO 2001 IS 1 A1 David Kwun YR 2001 UL https://pm-research.com/content/2001/1/77.abstract AB Prior to the release of FASB Statement 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, most U.S. corporations had difficulty hedging real economic interest-rate and cross-currency exposures under then-existing FAS 133 guidelines. With the adoption of FAS 138, the FASB agreed to allow the use of cross-currency interest-rate swaps to hedge foreign-currency-denominated debt liabilities as either fair value hedges or cash flow hedges, and also amended the definition of the “benchmark interest rate” to include rates based on LIBOR for interest-rate swaps. These two important changes offered entities complying with FAS 133 both preserved access to international capital markets and hedge accounting treatment that should reduce earnings volatility and thereby preserve corporate equity values.