Wal-Mart’s Use of Interest Rate Swaps

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Wal-Mart’s Use of Interest Rate Swaps

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Publication Date:
January 17, 2008

Source:
Harvard Business School

“Wal-Mart’s Use of Interest Rate Swaps” recounts Wal-Mart’s use of interest rate swaps to hedge the fair value of its fixed-rate debt against changing interest rates. This case provides students with a foundation for understanding the use of and accounting for more complex derivatives. Specific issues raised include: (1) the financial statement impact of hedge accounting, (2) motivations for using derivatives, including the potential role of accounting standards, and (3) the degree to which financial statement and MD&A disclosures are sufficiently informative about the risks associated with financial instruments.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

Wal-Mart’s Use of Interest Rate Swaps

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