Walmart's Use of Interest Rate Swaps
Posted: 23 Nov 2009
Date Written: January 17, 2008
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: Suggested Citation