Tasks to be completed when documenting an operation (from creation to publication)

 1. Enter the Title of the operation / page

2. Add the following Labels : 

    • Scope of applicability: ww, country_accounting 

    • Country or group of countries (if applicable): belux, china, france, italy, lam, nam, uk_ie, bulgaria, dach, netherlands, iberia, poland, latvia, australia, india, japan, south_korea, thailand, singapore, new_zealand, emea_transversal, apac_transversal

    • Unit and Domain according to the List of labels to be used in the Finance Service Line space

      • E.g. 1: WW Operation in Financial Accounting under domain "Central Finance Processes & Compliance":
        • Labels to be used: ww, financial_accounting, central_fin_proc_compliance

      • E.g. 2: France Operation in Financial Accounting:
        • Labels to be used: country_accounting, france, financial_accounting
          (for country operations, the Domain is always country_accounting)


3. Fill in all fields as described above

4. Name the title of each section using OPD methodology naming convention - Infinitive verb without the “to”, mainly action verb...something) - " I do something..."

5. Once the description of the operation is completed, ensure it is approved and published by launching the SBS-Finance approval workflow 


Domain: Treasury Reporting

Responsibility area: Perform Cash Flow Hedge documentation 0231 quarterly closure.

Table of contents 

By default the table of contents displays Heading 1 & Heading 2 (other levels can be added)


Scope

3. Remove the icon when not applicable

Please remove the icon when not applicable.


ERP

4. Remove the icon(s) when not applicable

Please remove the icon when not applicable.
Frequency

5. Remove the icon(s) when not applicable

Please remove the icon when not applicable.
References

6. Add the link to SAP transaction(s) (when it exists)



Forms

7. Insert the links accordingly and change the link text with the Form name



Attachments

8. Add the link to attachments or external links


 

 

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1. Objective and Scope

1.1. Objective of this Operation

WHY - Describe the objective of the operation

Italy follows IFRS accounting rules.

IFRS9 requires preparation of Hedge documentation in order to document the application of hedge accounting.

The documentation is shared with the external audit.

Syensqo FX Committee defines the group FX policy 3 times a year: February, July and November.

Two year budget of highly probable sale in foreign currency is forecasted.

Hedge strategy is established and approved.

Cash Flow hedge is performed by Group Treasury for the future 9 months.

The risk being hedged is the exposure to variability in cash flows of a highly probable sales forecast which could have been affected P&L if no hedge accounting is applied.

That is why we need to prepare the hedge documentation for the external audit to apply hedge accounting and reduce the volatility to P&L.

Provided the hedge is effective, changes in the fair value of the hedging instrument are initially recognized in OCI. (B/S Other Comprehensive Income)

The FX Committee presentation is shared by Treasury Front Office Team once finished.

Location of the files: \\lucapfs01sco.oxo.priv\LUCAP-USERS\Financial Controlling & Cash Accounting process\7 - Financial Controlling\8 - Hedge documentation\YYYY\5835 Solvay Speciality Polymers Italy Statutory docs

The files "GROUP FX Hedging Documentation - Currency Pair QX YYYY" which needs to be updated. 

We have to submit the hedge documentation to the external audit during the second week of March latest.

1.2. Scope

Detail the scope (legal entities, etc.)

Company 5835 Syensqo Speciality Polymers Italy 

2. Definitions

Definitions should be added in the Finance Glossary - Add definition and link it to respective Letter in Finance Glossary 

See Finance Glossary:

  • ...

3. Tasks description

WHAT and HOW - Main content of the operation

The content should be mainly organized in 2 levels of Headings to ensure a proper link with the Table of Contents.

Select the level of heading in the "Paragraph" option.

3.1. I update the file "Transactions_by_Deal_DTT_Lists_Report Italy DDMMYYYY" with information

3.1.1. I update the file "Transactions_by_Deal_DTT_Lists_Report Italy DDMMYYYY" with the information on CFH deals from TMS Quantum

Purpose: CFH deals data to update for JPY and USD vs EUR.

Steps to execute:

Open the working file "Transactions_by_Deal_Query_DTT_LIST_Report Italy DDMMYYYY.xls"

Go to TMS Quantum


and run the following report by selecting the following from the selection fields:


Press the button "Run Query".

Download the report and update the tub "Transactions by Deal-DTT Lists"

Refresh the following two pivot tables for two currency pairs EUR/JPY and EUR/USD.




3.1.2. I update the Realized FX sales data.

Purpose:

We need to ensure the application of the hedge accounting and effectiveness test.

The amount of realized sales should not exceed the hedge.

That is why we need to get the actual realized FX sales figures.

Steps to execute:

Go to SAP PI1- > Transaction  which is Display factoring contract(s).

Chose the variant → HEDGE DOC SCO

To have More Options - >


Put the relevant selection → Press Save button

Press Execute Button  

Sum Up by amount - >

In this example, we have the total FX sale in JPY and USD for the full year of 2024.

Download to excel via List - > Export - > Local File.

Past this report in tab

Do the pivot to see the totals by month by currency pair.


3.2. I update the forecast data.

Purpose: 

The hedges are done by Treasury based on the highly probable future cashflows.

We need to apply to the total forecast the percentage attributable only to the legal entity in Italy.

Steps to execute:

Go to the tab .

Source: Treasury

 


Go to the tab .

Source: Treasury


There is also another way to see the ratio of the actual hedges.

Opportunity: to use this ratio to apply to the forecast figures.

Go to the tab

Refresh the pivot tables.



3.3. I update the files "GROUP FX Hedging Documentation QX YYYY.doc" for each currency pair EURUSD and JPYEUR

Purpose:

We need to now prepare the hedge documentation which will be shared with the external local auditors.

Steps to execute:

Go to the files located here.

\\lucapfs01sco.oxo.priv\LUCAP-USERS\Financial Controlling & Cash Accounting process\7 - Financial Controlling\8 - Hedge documentation\YYYY\5835 Solvay Speciality Polymers Italy Statutory docs


Update the date


Update the data located in Appendixes on page 6 with the information on the forecasted probable cash flows.

Source: Go to the tab 



Update hedging instrument details on page 7.

Source: Go to the tab  

Refresh the pivot table.



Update the table in point 3 related to forecast / Realized sales data.

Source: go to the tab 

Attach the Entity's business plan in point 4.

Source: Treasury


Update the credit rating table in point 5 related to List of its acceptable counterparties.

Source: Treasury Tools & BAM Team

Perform the same steps for the currency pair EUR/JPY.


End of document.