Walmart's Use of Interest Rate Swaps

Posted: 23 Nov 2009

See all articles by Michael D. Kimbrough

Michael D. Kimbrough

University of Maryland - Robert H. Smith School of Business

Michael W. Faulkender

University of Maryland - Robert H. Smith School of Business

Nicole Thorne Jenkins

University of Kentucky - Von Allmen School of Accountancy, Gatton College of Business and Economics

Rachel Gordon

Harvard University - Business School (HBS)

Date Written: January 17, 2008

Abstract

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.

JEL Classification: A20

Suggested Citation

Kimbrough, Michael D. and Faulkender, Michael W. and Jenkins, Nicole Thorne and Gordon, Rachel, Walmart's Use of Interest Rate Swaps (January 17, 2008). HBS Case No. 108-038, Available at SSRN: https://ssrn.com/abstract=1511693

Michael D. Kimbrough (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

Robert H. Smith School of Business
College Park, MD 20742-9157
United States
301-405-8222 (Phone)
301-314-9414 (Fax)

Michael W. Faulkender

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Nicole Thorne Jenkins

University of Kentucky - Von Allmen School of Accountancy, Gatton College of Business and Economics ( email )

Lexington, KY 40506
United States

Rachel Gordon

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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