個案總覽

This case focuses on a $1.5 billion Net Investment Hedge using currency forward contracts executed by Boston Scientific Corporation in April 2018. A Net Investment Hedge is intended to offset the balance sheet translation of a company's net investment in non-dollar functional entities. This hedge was motivated by changes in both U.S. tax law and U.S accounting rules, combined with favorable interest rates overseas. The transaction was predicted to generate approximately $150 million in interest savings over five years. Part (A) explores the initial decision to enter the hedge.

Part (B) examines the implementation of the net investment hedge, including the realized forward contract rates, notional amounts, and tenors. Accounting-focused students are asked to confirm the accounting treatment of the net investment hedge under ASC 815, including footnote disclosures in form 10-Q and form 10-K.

Part (C) examines the net investment hedge a year after its implementation. It provides an opportunity for students to discuss how net investment hedges are reported, monitored, and evaluated, ex-post. It also considers a proposal to expand the hedge to additional currencies.