Hedge accounting: Difference between revisions
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imported>Doug Williamson m (Spacing 27/8/13) |
imported>Doug Williamson (Add "qualifying", "strict" and "including" for clarity, and add space.) |
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A system of incorporating a financial hedge into the accounting system. | A system of incorporating a financial hedge into the accounting system. | ||
Under International Financial Reporting Standards (IFRS) a hedge and the underlying transaction being hedged are accounted for separately. | Under International Financial Reporting Standards (IFRS) a qualifying hedge and the underlying transaction being hedged are accounted for separately. | ||
Hedge accounting ensures that both items receive similar accounting treatment. | Hedge accounting ensures that both items receive similar accounting treatment. | ||
There are qualifications that must be satisfied in order that hedge accounting may be used, for example that the hedge can be shown to be effective. | |||
There are strict qualifications that must be satisfied in order that hedge accounting may be used, including for example that the hedge can be shown to be effective. | |||
Revision as of 11:34, 12 May 2014
A system of incorporating a financial hedge into the accounting system.
Under International Financial Reporting Standards (IFRS) a qualifying hedge and the underlying transaction being hedged are accounted for separately.
Hedge accounting ensures that both items receive similar accounting treatment.
There are strict qualifications that must be satisfied in order that hedge accounting may be used, including for example that the hedge can be shown to be effective.
