BP Finance selects Wall Street Systems for IAS compliance
BP Finance has become the first European corporate to start using the Wall Street Systems Hedge Compliance Module to cope with the demands of IAS 39, the hedge accounting legislation that came into force on January 1 2005. As part of its hedging strategy, BP Finance uses derivatives to manage the FX exposure for non-functional currency forecast revenue and capital expenditure transactions.
David Bright, BP Finance's banking projects and systems manager, said: ?Due to the flexible nature of the system, the implementation required minimal bespoke enhancements ensuring that we were compliant with IAS 39 in advance of the January 1 deadline.?
BP Finance began discussions with Wall Street Systems in April 2004 and installed the module in August. Testing and configuration of the software, according to Bright, lasted just three months.
IAS 39 in Europe and FAS 133 in the US have changed the accounting principles for the recognition and measurement of financial instruments, especially derivatives, meaning that companies must now clearly demonstrate the effectiveness of hedging strategies.