--- title: FX Effectiveness Testing description: CNS Treasury’s Effectiveness Testing automates the evaluation of hedging relationships for IFRS9 compliance. This feature delivers real-time insights into hedge performance, allowing teams to optimise their risk management strategies. --- [Skip to content](https://kb.cnstreasury.com/cns-treasury-knowledge-base/fx-effectiveness-testing#main-content) English Show submenu for translations ![Primary Logo png-Dec-18-2023-02-56-38-8732-AM.png\]](https://kb.cnstreasury.com/hs-fs/hubfs/Primary%20Logo%20png-Dec-18-2023-02-56-38-8732-AM.png?height=50&name=Primary%20Logo%20png-Dec-18-2023-02-56-38-8732-AM.png) Open main navigation Close main navigation - English Show submenu for translations - Go to cnstreasury.com Go to cnstreasury.com Hello. How can we help you? - There are no suggestions because the search field is empty. 1. [CNS Treasury Knowledge Base](https://kb.cnstreasury.com/cns-treasury-knowledge-base?hsLang=en) 2. [Hedge Accounting IFRS9 Compliance](https://kb.cnstreasury.com/cns-treasury-knowledge-base/hedge-accounting-ifrs9-compliance?hsLang=en) 3. [FX Hedge Accounting](https://kb.cnstreasury.com/cns-treasury-knowledge-base/hedge-accounting-ifrs9-compliance?hsLang=en#fx-hedge-accounting) # FX Effectiveness Testing ## CNS Treasury’s Effectiveness Testing automates the evaluation of hedging relationships for IFRS9 compliance. This feature delivers real-time insights into hedge performance, allowing teams to optimise their risk management strategies. ### Effectiveness Testing CNS Treasury’s **Effectiveness Testing** feature automates the evaluation of hedging relationships to ensure they meet the criteria set by **IFRS9**. This process is crucial for determining whether a hedge is performing as expected by effectively offsetting the changes in fair value or cash flows of the hedged item. CNS Treasury conducts both **prospective** and **retrospective** effectiveness tests, providing comprehensive insights into the performance of your hedges and enabling informed adjustments when needed. ![](https://kb.cnstreasury.com/hs-fs/hubfs/image-png-Oct-09-2024-08-03-34-4608-AM.png?width=688&height=378&name=image-png-Oct-09-2024-08-03-34-4608-AM.png) #### Automated Prospective and Retrospective Testing CNS Treasury automates the **prospective testing** required at the start of a hedging relationship to assess if the hedge is expected to be effective in the future. Additionally, **retrospective testing** is performed periodically to confirm that the hedge has been effective over time. These automated tests remove the need for manual calculations, offering treasury teams accurate, real-time results that help ensure their hedging strategies are in compliance with accounting standards. #### Enhanced Decision-Making and Compliance By automating **effectiveness testing**, CNS Treasury helps businesses maintain compliance with **IFRS9** while providing critical data for decision-making. Treasury teams can easily track the effectiveness of their hedges, identify underperforming strategies, and make adjustments as needed to optimise their risk management approach. The platform also provides a clear audit trail, enhancing transparency and simplifying compliance reviews. In summary, CNS Treasury’s **Effectiveness Testing** feature ensures that hedging relationships are accurately evaluated, automated for efficiency, and compliant with regulatory standards, helping treasury teams manage their hedging strategies with confidence.   For assistance or to book a meeting, contact our support team at support@cnstreasury.com. 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