Publications
Publications
- January 2008 (Revised July 2010)
- HBS Case Collection
Wal-Mart's Use of Interest Rate Swaps
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.
Keywords
Fair Value Accounting; Financial Statements; Credit Derivatives and Swaps; Financial Strategy; Interest Rates; Corporate Disclosure
Citation
Kimbrough, Michael D., Michael Faulkender, Nicole Thorne Jenkins, and Rachel Gordon. "Wal-Mart's Use of Interest Rate Swaps." Harvard Business School Case 108-038, January 2008. (Revised July 2010.)