The FX year-end file your statutory auditor expects
On foreign exchange, the statutory auditor checks that all derivatives exist, that they are properly valued, properly qualified and correctly described in the notes. A file prepared in the order the auditor works shortens the review. The documents to gather, why your fair value will never match the bank's, and how to make the file reproducible.
The year-end of a company that hedges its FX produces a series of figures the statutory auditor must be able to check: the value of derivatives, translation differences, provisions, disclosures in the notes. When those figures arrive scattered — a bank statement here, a spreadsheet there — the review drags and questions pile up. When they arrive in a file built in the order the auditor works, it gets shorter.
What the statutory auditor checks
| What must be established | How it is done | Reference |
|---|---|---|
| That all derivatives exist, and none is missing | The auditor asks the banks directly through a confirmation request | NEP 505 |
| That they are correctly valued | The auditor assesses the method, assumptions and data used | NEP 540 |
| That they are properly qualified | The auditor checks the hedge documentation | PCG 628-10 or IFRS 9, 6.4.1 |
| That the notes are complete | The auditor reconciles the notes with the figures | PCG 838-13 or IFRS 7 |
The documents in the file, in review order
- 1Summary and methods
Framework (French GAAP or IFRS), closing date, policy choices: treatment of forward points and premiums, whether a global currency position is applied. An auditor always starts here.
- 2Inventory of instruments, by bank
Every contract live on the closing date, grouped by counterparty: this is what the auditor reconciles with the banks' replies.
- 3Fair value and its inputs
For each instrument, the value and the closing-date market data behind it: spot rate, forward points, volatility, with their date and time.
- 4Qualification
Hedge or isolated open position under French GAAP; designated or not under IFRS — with the corresponding documentation.
- 5Foreign-currency receivables and payables
Booking rate, closing rate, difference, hedged portion, provision.
- 6Forward points and premiums
The portion recognised in the year, according to the method chosen.
- 7Foreign-currency cash
Balances on the closing date and their remeasurement.
- 8Proposed journal entries
From figures to the books, account by account.
- 9Reconciliation with bank valuations
Contract by contract, the value used against the bank's, and the explanation of differences.
- 10Log of transactions in the period
Trades, maturities and early settlements: what explains the move from one inventory to the next.
- 11Draft note
The proposed text, written from the same figures.
Why your fair value will never match the bank's
This is the question almost every first review asks. Both figures are right, and they differ for known reasons:
- the company generally values at the market mid; the bank values on the side where it would unwind the contract, margin included;
- the bank often includes a credit risk adjustment;
- market data are not taken at the same time or from the same source.
The difference is not an anomaly to justify: it is information to explain. A file that shows, contract by contract, both values and the nature of the difference avoids a round trip with the auditor. A difference that none of these reasons explains, however, deserves a close look.
The three mistakes that lengthen the review
- 1Valuing on the wrong day
Derivatives must be valued with the market of the closing date, not that of the day the file is prepared. A file prepared on 15 January with 15 January rates is wrong.
- 2Missing a contract
A contract with a secondary bank, or a derivative embedded in a commercial contract, shows up in the confirmation reply without being in the file. It is the hardest question to deal with after the event.
- 3Documenting after the event
A hedge documented in January for a contract traded in March meets neither French GAAP's requirement to qualify at inception nor IFRS 9's requirement for formal designation at inception.
Make the file reproducible
The auditor must be able to find the same figures weeks later — and so must the company, if a question arises during the year. Three habits are enough:
- Keep the closing-date market data, with their source, rather than reading them again at review time.
- Lock a version of the file once finalised, and create a new dated, justified version if a correction is needed.
- Keep a record of who finalised what, and when.
The timetable
| When | What |
|---|---|
| Before year-end | Inventory of contracts, hedge documentation up to date, policy choices confirmed |
| Closing date | Capture of that day's market data |
| First days after | Valuation, translation differences, provisions, journal entries |
| On receipt of bank statements | Reconciliation of valuations, explanation of differences |
| Before the review | File locked, draft note written |
Sources
- French Accounting Standards Authority (ANC), Regulation No. 2014-03 on the French chart of accounts (PCG), consolidated version as of 1 January 2026: Articles 420-5 to 420-7 (foreign currencies), 628-1 to 628-18 (forward financial instruments) and 838-13 (notes).
- French professional standards for statutory auditors, adopted by the High Audit Authority (H2A, formerly H3C) and approved by ministerial order: NEP 505 "Requests for third-party confirmation"; NEP 540 on the audit of accounting estimates, in its revised version approved on 24 August 2021.
- IFRS 9 Financial Instruments, paragraph 6.4.1; IFRS 7 and IFRS 13.
- File structure: ELEGG FX Closing & audit module, as of 15 October 2026.
The FX year-end file, ready for review
ELEGG FX's Closing & audit module values your derivatives on the closing date, reconciles bank valuations, proposes the journal entries and the draft note, then locks the file handed to the auditor.
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Frequently asked questions
The questions finance departments ask most often on this topic
What does the statutory auditor check on FX derivatives?
That all derivatives exist and are recorded, which the auditor checks by asking the banks directly; that they are correctly valued; that they are properly qualified as hedges or not, with documentation; and that the notes give the required information.
Why does the company's fair value differ from the bank's?
The company generally values at the market mid, the bank on the side where it would unwind the contract, with its margin and often a credit risk adjustment, and not necessarily at the same time. The difference is normal and must be explained, contract by contract.
On what date should FX derivatives be valued for year-end?
On the closing date, with that day's market data, not on the date the file is prepared. Those data must be kept so the figures remain reproducible.
What must the notes on derivatives contain under French GAAP?
For each category of derivatives, fair value, volume and nature of the instruments linked to hedging strategies, the amount of realised results deferred on the balance sheet for hedges, and a narrative on strategies, notably optimisation transactions (Article 838-13 of the French chart of accounts).
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