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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
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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
Responsibility area: Perform Cash Flow Hedge documentation 0231 quarterly closure.
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<< I update files Cash Flow Hedge documentation for Syensqo Speciality Polymers Italy. >>
1. Objective and Scope
1.1. Objective of this 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
Company 5835 Syensqo Speciality Polymers Italy
2. Definitions
See Finance Glossary:
- ...
3. Tasks description
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.