AUD 3 Internal Control 16 - 7 Investing and Financing Cycle - Derivatives and Hedge Accounting Flashcards
1
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
2
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, or_________s, are exposed to market risks
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks
3
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to m___t risks such as interest rate risk,
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk,
4
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as in_______ rate risk, foreign exchange risk,
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk,
5
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, fo______ exchange risk, commodity price risk,
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk,
6
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign ex________ risk, commodity price risk,
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk,
7
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, com_______ price risk, etc., that give rise to income volatility.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
8
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity pr___ risk, etc., that give rise to income volatility.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
9
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to in____ volatility.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
10
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income vo______y.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
11
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, orga_________s often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
12
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mi______ or economically hedge against such exposures using derivative financial instruments.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
13
Q
The Basics of Accounting for Derivatives and Hedge Accounting
As a result, organizations often will take some action to mitigate or eco________lly hedge against such exposures
A
The Basics of Accounting for Derivatives and Hedge Accounting
As a result, organizations often will take some action to mitigate or economically hedge against such exposures
14
Q
The Basics of Accounting for Derivatives and Hedge Accounting
As a result, organizations often will take some action to mitigate or economically h_____ against such exposures using derivative financial instruments.
A
The Basics of Accounting for Derivatives and Hedge Accounting
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
15
Q
The Basics of Accounting for Derivatives and Hedge Accounting
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using de_______ financial instruments.
A
The Basics of Accounting for Derivatives and Hedge Accounting
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
16
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative fin________ instruments.
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
17
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
In addition some org________s may enter into derivative contracts for speculative or trading purposes.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
18
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In addition some organizations may enter into de_______ contracts for speculative or trading purposes.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
19
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In addition some organizations may enter into derivative con____s for speculative or trading purposes.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
20
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In addition some organizations may enter into derivative contracts for spe________ or trading purposes.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
21
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In addition some organizations may enter into derivative contracts for speculative or t___ing purposes.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
22
Q
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
A
The Basics of Accounting for Derivatives and Hedge Accounting
In the regular course of business operations, organizations, are exposed to market risks such as interest rate risk, foreign exchange risk, commodity price risk, etc., that give rise to income volatility.
As a result, organizations often will take some action to mitigate or economically hedge against such exposures using derivative financial instruments.
In addition some organizations may enter into derivative contracts for speculative or trading purposes.
23
Q
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
A
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
24
Q
Accounting for Derivative Instruments
Under current U.S. and International ac______ing standards,
A
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
25
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an e____y is required to measure derivative instruments at fair value,
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value,
26
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to me_____ derivative instruments at fair value,
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value,
27
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure der_______ instruments at fair value, or mark-to-market (MTM),
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
28
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative ins________s at fair value, or mark-to-market (MTM),
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
29
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at f___ value, or mark-to-market (MTM),
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
30
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
with changes in f___ value or MTM to be recognized through the income statement.
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
with changes in fair value or MTM to be recognized through the income statement.
31
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
with ch____s in fair value or MTM to be recognized through the income statement.
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
with changes in fair value or MTM to be recognized through the income statement.
32
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
with changes in fair value or MTM to be r_____ized through the income statement.
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
with changes in fair value or MTM to be recognized through the income statement.
33
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
with changes in fair value or MTM to be recognized through the in____ statement.
Accounting for Derivative Instruments
Under current U.S. and International accounting standards,
an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM),
with changes in fair value or MTM to be recognized through the income statement.
34
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is re____ed to measure de_______ instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
35
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be re_________ed through the in____ statement.
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
36
Accounting for Derivative Instruments
Fair value is de____d under U.S. accounting standards as
“the price that would be received to sell an asset,
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
37
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting sta______s as
“the price that would be received to sell an asset,
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
38
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the p___ that would be received to sell an asset,
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
39
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be re_____d to sell an asset,
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
40
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to s__l an asset,
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset, .”
41
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an a___t,
or paid to transfer a liability
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability
42
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or p___ to transfer a liability
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability
43
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to tr_____ a liability in an orderly transaction
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
44
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a li_____ty in an orderly transaction
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
45
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly tra________
between market participants at the measurement date.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.”
46
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between ma____ participants
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between market participants
47
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between market pa_________s at the measurement date.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.”
48
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between market participants at the me________t date.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.”
49
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between market participants at the measurement d___.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as
“the price that would be received to sell an asset,
or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.”
50
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the pr___ that would be re___ed to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
51
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to s_ll an as__t, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
52
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or p___ to tr_____r a liability in an orderly transaction between market participants at the measurement date.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
53
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction bet____ mar___ participants at the measurement date.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
54
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the me_________t d___.”
Accounting for Derivative Instruments
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
55
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
56
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
International accounting st________s define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
Accounting for Derivative Instruments
Under current U.S. and International accounting standards, an entity is required to measure derivative instruments at fair value, or mark-to-market (MTM), with changes in fair value or MTM to be recognized through the income statement.
Fair value is defined under U.S. accounting standards as “the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
International accounting standards define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
57
Accounting for Derivative Instruments
In_________ accounting standards define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
58
Accounting for Derivative Instruments
International ac_______ng standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
59
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the am___t for which an asset could be exchanged,
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
60
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an as___ could be exchanged,
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
61
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a l_____y settled,
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
62
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability s____ed,
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
63
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
between kno__________le, willing parties
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
between knowledgeable, willing parties
64
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
between knowledgeable, w__ling parties
in an arm’s length transaction.”
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
between knowledgeable, willing parties
in an arm’s length transaction.”
65
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
between knowledgeable, willing parties
in an arm’s l___th transaction.”
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
between knowledgeable, willing parties
in an arm’s length transaction.”
66
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
between knowledgeable, willing parties
in an arm’s length tr________n.”
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as
“the amount for which an asset could be exchanged,
or a liability settled,
between knowledgeable, willing parties
in an arm’s length transaction.”
67
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as “the amount for which an as___ could be ex_______ed, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
68
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, w___ing p___ies in an arm’s length transaction.”
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
69
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
Non-performance r___ or the risk that an obligation will not be fulfilled (also known as credit risk) is also required to be incorporated into the fair value measurement. While the definitions differ, the principle is generally the same in the U.S. and internationally.
Accounting for Derivative Instruments
International accounting standards define fair value slightly differently as “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.”
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk) is also required to be incorporated into the fair value measurement. While the definitions differ, the principle is generally the same in the U.S. and internationally.
70
Accounting for Derivative Instruments
N__-performance risk or the risk that an obligation will not be fulfilled
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled
71
Accounting for Derivative Instruments
Non-performance risk or the ri__ that an obligation will not be fulfilled
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled
72
Accounting for Derivative Instruments
Non-performance risk or the risk that an ob_______ will not be fulfilled
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled
73
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will n__ be fulfilled
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled
74
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be f___illed (also known as credit risk)
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
75
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit ri__)
is also required to be incorporated into the fair value measurement. While the definitions differ, the principle is generally the same in the U.S. and internationally.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement. While the definitions differ, the principle is generally the same in the U.S. and internationally.
76
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit ri__)
is also required to be incorporated into the fair value measurement.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
77
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also re____ed to be incorporated into the fair value measurement.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
78
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the f___ value measurement.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
79
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be inc_______ed into the fair value measurement.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
80
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value mea________t.
While the definitions differ, the principle is generally the same in the U.S. and internationally.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
While the definitions differ, the principle is generally the same in the U.S. and internationally.
81
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
While the definitions differ, the pri_____e is generally the same in the U.S. and internationally.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
While the definitions differ, the principle is generally the same in the U.S. and internationally.
82
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
While the definitions differ, the principle is generally the s___ in the U.S. and internationally.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk)
is also required to be incorporated into the fair value measurement.
While the definitions differ, the principle is generally the same in the U.S. and internationally.
83
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk) is also required to be incorporated into the fair value measurement.
While the definitions differ, the principle is generally the same in the U.S. and in_________lly.
Accounting for Derivative Instruments
Non-performance risk or the risk that an obligation will not be fulfilled (also known as credit risk) is also required to be incorporated into the fair value measurement.
While the definitions differ, the principle is generally the same in the U.S. and internationally.
84
What is non-performance risk?
What is non-performance risk?
Non-performance risk = The risk that an obligation will not be fulfilled
(also known as credit risk)
85
What is non-performance risk?
What is non-performance risk?
Non-performance risk = Credit Risk
86
What is credit risk?
What is credit risk?
Credit Risk = The risk that an obligation will not be fulfilled
87
The risk that an obligation will not be fulfilled is
The risk that an obligation will not be fulfilled is
= Credit Risk
= Non-performance risk
88
What is credit risk?
What is credit risk?
Credit Risk = The risk that an obligation will not be fulfilled
89
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between the derivative instrument which is measured at fair value, and the underlying exposure being hedged, as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized.
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between the derivative instrument which is measured at fair value, and the underlying exposure being hedged, as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized.
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
90
Non-performance risk =
Non-performance risk = Credit Risk
91
Hedge Accounting
Accounting for de________ instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
92
Hedge Accounting
Accounting for derivative instruments at f___ value creates a common issue for organizations that hedge risks using such instruments.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
93
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that h___e risks using such instruments.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
94
Hedge Accounting
Accounting for derivative instruments at fair value creates a common is___ for organizations that hedge risks using such instruments.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
95
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such org________s may face an accounting mismatch between
1) the derivative instrument
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument
96
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mis______ between
1) the derivative instrument
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument
97
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the de________ instrument which is measured at fair value,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value,
98
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative ins_________ which is measured at fair value,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized.
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
99
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is me________ at fair value,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value,
100
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at f___ value,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value,
101
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the un______ng exposure being hedged,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
102
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying ex________ being hedged,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
103
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being h___ed,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
104
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying ex_____es are recognized assets or liabilities
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities
105
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are re______ed assets or liabilities
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities
106
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as ty_____ly underlying exposures are recognized assets or liabilities
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities
107
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized as___s or liabilities
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities
108
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or lia_____ies that are accounted for
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
109
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are ac_____ted for
on a cost or an amortized cost basis,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
110
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a c___ or an amortized cost basis,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
111
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an am______ed cost basis,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
112
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized c___t basis,
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
113
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost b___s,
or future transactions
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions
114
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or fu____ transactions that have yet to be recognized.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
115
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future tr_________s that have yet to be recognized.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
116
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be re_______ed.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
117
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting m________h between
1) the der_______ instrument which is measured at fair value, and
2) the underlying exp______ being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
118
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at f___ va___, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
119
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a c___ or an amortized cost b___s,
or future transactions that have yet to be recognized.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
120
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or fu____ transactions that have yet to be re_______ed.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
121
Hedge Accounting
Accounting for derivative instruments at fair value creates a common is____ for organizations that h___e risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for
on a cost or an amortized cost basis,
or future transactions that have yet to be recognized.
122
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized.
This ac_______ing mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized.
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
123
Hedge Accounting
This accounting mi______ results in volatility in the financial statements
Hedge Accounting
This accounting mismatch results in volatility in the financial statements
124
Hedge Accounting
This accounting mismatch results in vo_____ty in the financial statements
Hedge Accounting
This accounting mismatch results in volatility in the financial statements
125
Hedge Accounting
This accounting mismatch results in volatility in the fi_______ statements as there is no offset
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset
126
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is n_ offset to the change
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change
127
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no of___t to the change in the fair value
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value
128
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the ch_____ in the fair value of the derivative instrument.
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
129
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the f___ value of the derivative instrument.
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
130
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the de_______ instrument.
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
131
Hedge Accounting
Accounting for derivative instruments at fair value creates a co_____ issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized.
This accounting mi_______ results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
Hedge Accounting
Accounting for derivative instruments at fair value creates a common issue for organizations that hedge risks using such instruments.
Specifically, such organizations may face an accounting mismatch between
1) the derivative instrument which is measured at fair value, and
2) the underlying exposure being hedged,
as typically underlying exposures are recognized assets or liabilities that are accounted for on a cost or an amortized cost basis, or future transactions that have yet to be recognized.
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
132
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
Hedge ac______ing provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
Hedge Accounting
This accounting mismatch results in volatility in the financial statements as there is no offset to the change in the fair value of the derivative instrument.
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
133
Hedge Accounting
He___ accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
134
Hedge Accounting
Hedge accounting provides this off___ by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
135
Hedge Accounting
Hedge accounting provides this offset by eff______ly eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
136
Hedge Accounting
Hedge accounting provides this offset by effectively el______ing/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
137
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ r____cing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
138
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mis____ through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
139
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. F___ V____ Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
140
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. C___ F____ Hedge
3. Net Investment Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
141
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. N__ In________ Hedge
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
142
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
143
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is ac_____ed by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
144
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by ac______ing for the underlying exposure,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure,
145
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the un_____ing exposure,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure,
146
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exp_____, asset or liability
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability
147
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, as___ or liability
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability
148
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or lia_____y
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability
149
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the h____ed item)
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
150
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged i___)
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
151
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by ad____ing the carrying value
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value
152
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the c____ing value
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value
153
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying va___ for changes in the hedged risk,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
154
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for c______s in the hedged risk,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
155
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged r___,
which would then offset,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset,
156
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then of___t, to the extent effective,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective,
157
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent eff______, the change in the fair value
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value
158
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the ch____ in the fair value
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value
159
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair v____ of the derivative instrument,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
160
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the de______ instrument,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
161
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by ac______ing for the un______ing exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
162
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by ad_____ng the ca___ing value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
Hedge Accounting
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
163
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then off___, to the extent effective, the ch____ in the fair value of the derivative instrument,
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
164
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
165
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where ch_____ in the fair value of the derivative instrument are deferred in shareholders equity,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity,
166
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the f___ value of the derivative instrument are deferred in shareholders equity,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity,
167
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the de_______ instrument are deferred in shareholders equity,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity,
168
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are de____ed in shareholders equity,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity,
169
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in sh_______s equity, to the extent effective,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
170
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders e_____y, to the extent effective,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
171
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent eff_______,
until the underlying exposure impacts the income statement
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement
172
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the un________ing exposure impacts the income statement
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement
173
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying ex_______ impacts the income statement
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement
174
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure im____s the income statement in the future,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
175
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the in____ statement in the future,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
176
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the fu____,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
177
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where ch____s in the f___ value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
178
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where ch____s in the fair value of the derivative instrument are d_____ed in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
179
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in sha________s e___ty, to the extent effective,
until the underlying exposure impacts the income statement in the future,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
180
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the un_____ing exposure im____s the income statement in the future,
Hedge Accounting
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
181
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
182
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
NET INVESTMENT HEDGE
3. Through a N__ Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
183
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net In__________ Hedge
which is a variation on a cash flow hedge,
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
184
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a c__h flow hedge,
used to hedge foreign exchange risk
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk
185
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge for____ exchange risk
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk
186
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange r__k associated with net investments in foreign currency
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency
187
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net inv________s in foreign currency denominated operations.
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
188
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign cur______y denominated operations.
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
189
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated ope_______s.
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
190
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a va_______n on a cash flow h___e,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
191
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exc______e ri__ associated with net investments in foreign currency denominated operations.
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
192
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
Hedge Accounting
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
193
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
-------------
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
Hedge Accounting
Hedge accounting provides this offset by effectively eliminating/ reducing the accounting mismatch through one of three ways:
1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge
-------------
FAIR VALUE HEDGE
1. Through a Fair Value Hedge,
which is achieved by accounting for the underlying exposure, asset or liability (typically referred to as the hedged item)
by adjusting the carrying value for changes in the hedged risk,
which would then offset, to the extent effective, the change in the fair value of the derivative instrument,
CASH FLOW HEDGE
2. Through a Cash Flow Hedge
where changes in the fair value of the derivative instrument are deferred in shareholders equity, to the extent effective,
until the underlying exposure impacts the income statement in the future,
NET INVESTMENT HEDGE
3. Through a Net Investment Hedge
which is a variation on a cash flow hedge,
used to hedge foreign exchange risk associated with net investments in foreign currency denominated operations.
194
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the fair value of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
The hedged item is permitted to measured at fair value each period in respect of the hedged risk (not for all risks), even if the hedged item is normally measured at amortized cost.
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Stmt
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Stmt
attributable to risk hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the fair value of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
The hedged item is permitted to measured at fair value each period in respect of the hedged risk (not for all risks), even if the hedged item is normally measured at amortized cost.
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Stmt
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Stmt
attributable to risk hedged ]
195
Hedge Accounting
1. FAIR VALUE HEDGE
A F___ Value Hedge is used when an entity is looking to eliminate or reduce the exposure
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
196
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an e___ty is looking to eliminate or reduce the exposure
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
197
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eli______ or reduce the exposure
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
198
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or re____ the exposure
that arises from changes in the fair value
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value
199
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the ex_______
that arises from changes in the fair value
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value
200
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from ch____s in the fair value
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value
201
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair va___ of a financial asset or liability
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability
202
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial a___t or liability
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability
203
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or li____lity (or other eligible exposure)
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
204
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to ch____s in a particular risk,
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk,
205
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular r___, such as interest rate risk on a fixed rate debt instrument.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
206
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as in_______ rate risk on a fixed rate debt instrument.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
207
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate ri__ on a fixed rate debt instrument.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
208
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fi__d rate debt instrument.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
209
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate d__t instrument.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
210
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt in________.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
211
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eli_______ or reduce the ex________
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
212
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from ch_____s in the fair va___ of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
213
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to ch_____s in a particular ri__, such as interest rate risk on a fixed rate debt instrument.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure
that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
214
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the fair value of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
The h___ed item is permitted to measured at fair value each period in respect of the hedged risk (not for all risks), even if the hedged item is normally measured at amortized cost.
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the fair value of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
The hedged item is permitted to measured at fair value each period in respect of the hedged risk (not for all risks), even if the hedged item is normally measured at amortized cost.
215
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged i___ is permitted to measured at fair value each period
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
216
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to m_______d at fair value each period
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
217
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at f___ value each period
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
218
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value e___ period
in respect of the hedged risk
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk
219
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the h___ed risk (not for all risks),
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
220
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged ri__ (not for all risks),
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
221
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the h___ed item is normally measured at amortized cost.
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged item is normally measured at amortized cost.
222
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged i___ is normally measured at amortized cost.
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged item is normally measured at amortized cost.
223
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged item is no____lly measured at amortized cost.
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged item is normally measured at amortized cost.
224
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged item is normally measured at am_____ed cost.
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged item is normally measured at amortized cost.
225
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged item is normally measured at amortized c___.
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period
in respect of the hedged risk (not for all risks),
even if the hedged item is normally measured at amortized cost.
226
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged it__ is permitted to measured at fair va___ each period in respect of the hedged risk (not for all risks), even if the hedged item is normally measured at amortized cost.
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
Hedge Accounting
1. FAIR VALUE HEDGE
The hedged item is permitted to measured at fair value each period in respect of the hedged risk (not for all risks), even if the hedged item is normally measured at amortized cost.
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
227
Hedge Accounting
1. FAIR VALUE HEDGE
Any res___ing adjustment to the carrying amount of the hedged item
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item
228
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adj________ to the carrying amount of the hedged item
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item
229
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the ca___ing amount of the hedged item
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item
230
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the he___d item related to the hedged risk is recognized in profit or loss,
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
231
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged ri__ is recognized in profit or loss,
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
232
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged it__ related to the hedged risk is recognized in profit or loss,
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
233
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is re____ized in profit or loss,
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
234
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in p___it or loss,
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
235
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or l__s,
even if such a change normally would be recognized in Other Comprehensive Income (OCI)
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI)
236
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a ch_____ normally would be recognized in Other Comprehensive Income (OCI)
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI)
237
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change no___lly would be recognized in Other Comprehensive Income (OCI)
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI)
238
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be re____ized in Other Comprehensive Income (OCI)
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI)
239
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (O__)
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI)
240
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comp________ Income (OCI)
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI)
241
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI) –
for example
in the case of an in_________ classified as available for sale.
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI) –
for example
in the case of an instrument classified as available for sale.
242
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI) –
for example
in the case of an instrument classified as av_______ for sale.
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI) –
for example
in the case of an instrument classified as available for sale.
243
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI) –
for example
in the case of an instrument classified as available for s___.
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss,
even if such a change normally would be recognized in Other Comprehensive Income (OCI) –
for example
in the case of an instrument classified as available for sale.
244
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged i___ related to the hedged risk is re____ized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
245
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument c_____ied as available for sa__.
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
246
Hedge Accounting
1. FAIR VALUE HEDGE
Any re____ing adju_______ to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
247
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
248
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Der_______ Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
249
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Inst________
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
250
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of He___ Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
251
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge I___
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
252
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to ri__ hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
253
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk h___ed ]
Hedge Accounting
1. FAIR VALUE HEDGE
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
254
Hedge Accounting
1. FAIR VALUE HEDGE
A F__r Va___ He___ is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the fair value of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
The hedged item is permitted to measured at fair value each period in respect of the hedged risk (not for all risks), even if the hedged item is normally measured at amortized cost.
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
Hedge Accounting
1. FAIR VALUE HEDGE
A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the fair value of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.
The hedged item is permitted to measured at fair value each period in respect of the hedged risk (not for all risks), even if the hedged item is normally measured at amortized cost.
Any resulting adjustment to the carrying amount of the hedged item related to the hedged risk is recognized in profit or loss, even if such a change normally would be recognized in Other Comprehensive Income (OCI) – for example in the case of an instrument classified as available for sale.
Measurement of Derivative Instrument
[ Change in Fair Value ] + / - --> Income Statement
Measurement of Hedge Item
[ Change in Fair Value + / - --> Income Statement
attributable to risk hedged ]
255
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion ) is recognized immediately in profit or loss.
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
The change in the fair value of the hedging instrument that is deferred in OCI is reclassified to profit or loss at a future date when the hedged item affects profit or loss (for example, when the interest payment on a floating rate debt instrument is made or when the payment associated with an anticipated transaction occurs).
The Cash Flow Hedge
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion ) is recognized immediately in profit or loss.
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
The change in the fair value of the hedging instrument that is deferred in OCI is reclassified to profit or loss at a future date when the hedged item affects profit or loss (for example, when the interest payment on a floating rate debt instrument is made or when the payment associated with an anticipated transaction occurs).
The Cash Flow Hedge
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
256
Hedge Accounting
2. CASH FLOW HEDGE
A C__h Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
257
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eli_____ or reduce the exposure
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure
258
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the ex______ that arises from changes in the cash flows
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows
259
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from ch____s in the cash flows
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of
260
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the c__h flows of a financial asset or liability
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability
261
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial as___ or liability (or other eligible exposure)
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
262
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or li___lity (or other eligible exposure)
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
263
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eli_____ exposure)
due to changes in a particular risk,
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk,
264
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible ex______)
due to changes in a particular risk,
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk,
265
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular ri__, such as interest rate risk on a floating rate debt instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
266
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to ch___es in a particular risk, such as interest rate risk on a floating rate debt instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
267
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as in______ rate risk on a floating rate debt instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
268
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a fl___ing rate debt instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
269
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating r___ debt instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
270
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate d__t instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure)
due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
271
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the c__h fl__s of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
272
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial as___ or li___lity (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
273
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
The hedged i___ is accounted for under normal principles.
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
The hedged item is accounted for under normal principles.
274
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is ac______ed for under normal principles.
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
275
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under n_____l principles.
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
276
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal pri_______s.
The hedging derivative instrument is measured at fair value each period
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period
277
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The h___ing derivative instrument is measured at fair value each period
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period
278
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative in_________ is measured at fair value each period
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period
279
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging der_______ instrument is measured at fair value each period
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period
280
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at f___ value each period
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period
281
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each per___ however, the effective portion of the change in fair value is deferred in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI
282
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the eff______ portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI
283
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective por____ of the change in fair value is deferred in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI
284
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the ch_____ in fair value is deferred in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI
285
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is d______ed in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI
286
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in O__ and presented within equity
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity
287
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within e_____y (normally in a hedging reserve).
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
288
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a h___ing reserve).
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
289
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging re___ve).
Hedge Accounting
2. CASH FLOW HEDGE
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
290
Hedge Accounting
2. CASH FLOW HEDGE
The hedging deri______ instrument is me____ed at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
Hedge Accounting
2. CASH FLOW HEDGE
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
291
Hedge Accounting
2. CASH FLOW HEDGE
The hedging derivative instrument is measured at fair value each period however, the eff______ portion of the change in fair value is de___ed in OCI and presented within equity (normally in a hedging reserve).
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion ) is recognized immediately in profit or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion ) is recognized immediately in profit or loss.
292
Hedge Accounting
2. CASH FLOW HEDGE
The diff_____e between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in profit or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in profit or loss.
293
Hedge Accounting
2. CASH FLOW HEDGE
The difference bet____
the effective portion of the change in the fair value
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value
294
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the eff______ portion of the change in the fair value
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value
295
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the ch_____ in the fair value of the derivative hedging instrument
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
296
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the f___ value of the derivative hedging instrument
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument .
297
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the der_______ hedging instrument
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
298
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging ins_________
and the full change in the fair value
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (
299
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full ch____ in the fair value
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value
300
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the f_ll change in the f___ value (the ineffective portion )
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
301
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineff_____ portion )
is recognized immediately in profit or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in profit or loss.
302
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is re______ed immediately in profit or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in profit or loss.
303
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized im______ly in profit or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in profit or loss.
304
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in pr___t or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in profit or loss.
305
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in profit or l__s.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between
the effective portion of the change in the fair value of the derivative hedging instrument
and the full change in the fair value (the ineffective portion )
is recognized immediately in profit or loss.
306
Hedge Accounting
2. CASH FLOW HEDGE
The diff________ between the eff_______ portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion) is recognized immediately in profit or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion) is recognized immediately in profit or loss.
307
Hedge Accounting
2. CASH FLOW HEDGE
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full ch_____ in the fair value (the inef_______ portion) is recognized immediately in profit or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion) is recognized immediately in profit or loss.
308
Hedge Accounting
2. CASH FLOW HEDGE
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion) is recognized immediately in profit or loss.
= The difference is recognized immediately in profit or loss.
Hedge Accounting
2. CASH FLOW HEDGE
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion) is recognized immediately in profit or loss.
= The difference is recognized immediately in profit or loss.
309
Hedge Accounting
2. CASH FLOW HEDGE
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion) is recognized immediately in profit or loss.
= The difference is recognized immediately in profit or loss.
A Cash Flow Hedge only has me____ed ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
Hedge Accounting
2. CASH FLOW HEDGE
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion) is recognized immediately in profit or loss.
= The difference is recognized immediately in profit or loss.
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
310
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineff_________
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
311
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the ch_____ in the fair value of the derivative instrument
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
312
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the f__r value of the derivative instrument
exceeds the change in the present value
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value
313
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the der______ instrument
exceeds the change in the present value
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value
314
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exc___s the change in the present value
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value
315
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the ch_____ in the present value of the future cash flows
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows
316
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the pre____ value of the future cash flows
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows
317
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the fu____ cash flows of the hedged item
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item
318
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future c__h flows of the hedged item
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item
319
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the h___ed item/ exposure
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
320
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged i___/ exposure
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
321
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exp_____
(referred to as an “over hedge”).
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
(referred to as an “over hedge”).
322
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
(referred to as an “ov__ hedge”).
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
(referred to as an “over hedge”).
323
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
(referred to as an “o__r hedge”).
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
(referred to as an “over hedge”).
324
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
(referred to as an “over h___e”).
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness
where the change in the fair value of the derivative instrument
exceeds the change in the present value of the future cash flows of the hedged item/ exposure
(referred to as an “over hedge”).
325
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge o__y has me____ed ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
326
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has me_____ed ineff______ess where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
327
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness where the ch_____ in the fair value of the derivative instrument exc___s the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
328
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the fu____ c__h flows of the hedged item/ exposure (referred to as an “over hedge”).
The change in the fair value of the hedging instrument that is deferred in OCI is reclassified to profit or loss at a future date when the hedged item affects profit or loss (for example, when the interest payment on a floating rate debt instrument is made or when the payment associated with an anticipated transaction occurs).
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
The change in the fair value of the hedging instrument that is deferred in OCI is reclassified to profit or loss at a future date when the hedged item affects profit or loss (for example, when the interest payment on a floating rate debt instrument is made or when the payment associated with an anticipated transaction occurs).
329
Hedge Accounting
2. CASH FLOW HEDGE
The cha___ in the fair value of the hedging instrument that is deferred in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
(for example,
when the interest payment on a floating rate debt instrument is made
or when the payment associated with an anticipated transaction occurs).
330
Hedge Accounting
2. CASH FLOW HEDGE
The change in the f__ value of the hedging instrument that is deferred in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
331
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the h___ing instrument that is deferred in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
332
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging inst_______ that is deferred in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
333
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is de____ed in OCI
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
334
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in O__
is reclassified to profit or loss
at a future date
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
335
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is recl_____ed to profit or loss
at a future date
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
336
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to pro___ or loss
at a future date
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
337
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a fut___ date
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
338
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future d___
when the hedged item affects profit or loss
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
339
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged it__ affects profit or loss
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
340
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item af____s profit or loss
(for example,
when the interest payment on a floating rate debt instrument is made )
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
(for example,
when the interest payment on a floating rate debt instrument is made )
341
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or l__s
(for example,
when the interest payment on a floating rate debt instrument is made
or when the payment associated with an anticipated transaction occurs).
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
(for example,
when the interest payment on a floating rate debt instrument is made
or when the payment associated with an anticipated transaction occurs).
342
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
(for example,
when the interest payment on a floating r___ debt instrument is made
or when the payment associated with an anticipated transaction occurs).
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
(for example,
when the interest payment on a floating rate debt instrument is made
or when the payment associated with an anticipated transaction occurs).
343
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
(for example,
when the interest payment on a floating rate debt instrument is made
or when the payment associated with an anticipated tran______ occurs).
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI
is reclassified to profit or loss
at a future date
when the hedged item affects profit or loss
(for example,
when the interest payment on a floating rate debt instrument is made
or when the payment associated with an anticipated transaction occurs).
344
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is de____ed in OCI is rec_____ied to profit or loss at a future date when the hedged item affects profit or loss
(for example, when the interest payment on a floating rate debt instrument is made or when the payment associated with an anticipated transaction occurs).
The Cash Flow Hedge
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
Hedge Accounting
2. CASH FLOW HEDGE
The change in the fair value of the hedging instrument that is deferred in OCI is reclassified to profit or loss at a future date when the hedged item affects profit or loss
(for example, when the interest payment on a floating rate debt instrument is made or when the payment associated with an anticipated transaction occurs).
The Cash Flow Hedge
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
345
Hedge Accounting
2. CASH FLOW HEDGE
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently trans____ed out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
Hedge Accounting
2. CASH FLOW HEDGE
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income SStatement tmt
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
346
Hedge Accounting
2. CASH FLOW HEDGE
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of O__ based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
Hedge Accounting
2. CASH FLOW HEDGE
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
347
Hedge Accounting
2. CASH FLOW HEDGE
Measurement of Deri_____
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
Hedge Accounting
2. CASH FLOW HEDGE
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
348
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion ) is recognized immediately in profit or loss.
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
The change in the fair value of the hedging instrument that is deferred in OCI is reclassified to profit or loss at a future date when the hedged item affects profit or loss (for example, when the interest payment on a floating rate debt instrument is made or when the payment associated with an anticipated transaction occurs).
The Cash Flow Hedge
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
Hedge Accounting
2. CASH FLOW HEDGE
A Cash Flow Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.
The hedged item is accounted for under normal principles.
The hedging derivative instrument is measured at fair value each period however, the effective portion of the change in fair value is deferred in OCI and presented within equity (normally in a hedging reserve).
The difference between the effective portion of the change in the fair value of the derivative hedging instrument and the full change in the fair value (the ineffective portion ) is recognized immediately in profit or loss.
A Cash Flow Hedge only has measured ineffectiveness where the change in the fair value of the derivative instrument exceeds the change in the present value of the future cash flows of the hedged item/ exposure (referred to as an “over hedge”).
The change in the fair value of the hedging instrument that is deferred in OCI is reclassified to profit or loss at a future date when the hedged item affects profit or loss (for example, when the interest payment on a floating rate debt instrument is made or when the payment associated with an anticipated transaction occurs).
The Cash Flow Hedge
Measurement of Derivative
[ Change in Fair Value ]
Recognition
Effective Portion --> OCI (SHs’ Equity)
I
V*
Ineffective Portion --> Income Statement
*Amounts are subsequently transferred out of OCI based on the same timing as the hedged item impacts income (interest income, interest expenses, etc.)
349
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
Similarly, when non-derivative instrument is used, the foreign currency translation gain or loss is recognized in equity (as opposed to profit or loss).
The Net Investment Hedge
Measurement of Derivative
[Change in Fair Value]
Recognition [Net Investment
in Foreign Operation]
1) Effective -to-- (SHs’ Equity) -from- Foreign Currency
Portion Gain / Loss
l
V*
2) Ineffective --> Income Statement
Portion
*Amounts are subsequently transferred out of Shareholders’ Equity in the same period during which corresponding exchange gains or losses arising from the translation of the financial statements of the foreign operation are recognized in the net income.
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
Similarly, when non-derivative instrument is used, the foreign currency translation gain or loss is recognized in equity (as opposed to profit or loss).
The Net Investment Hedge
Measurement of Derivative
[Change in Fair Value]
Recognition [Net Investment
in Foreign Operation]
1) Effective -to-- (SHs’ Equity) -from- Foreign Currency
Portion Gain / Loss
l
V*
2) Ineffective --> Income Statement
Portion
*Amounts are subsequently transferred out of Shareholders’ Equity in the same period during which corresponding exchange gains or losses arising from the translation of the financial statements of the foreign operation are recognized in the net income.
350
Hedge Accounting
3. NET INVESTMENT HEDGE
A N__ Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
351
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of fo_____ currency cash flow hedge
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
352
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign cur____y cash flow hedge
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
353
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency c__h flow hedge
that is used to eliminate or reduce the foreign currency exposure
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency exposure
354
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash fl__ hedge
that is used to eliminate or reduce the foreign currency exposure
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency exposure
355
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eli_______ or reduce the foreign currency exposure
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency exposure
356
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency ex_______
that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency exposure
that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
357
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency exposure
that arises from an entity’s Net Investment in a For____ Operation (NIFO).
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency exposure
that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
358
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency exposure
that arises from an entity’s Net Investment in a Foreign Operation (NI__).
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge
that is used to eliminate or reduce the foreign currency exposure
that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
359
What is NIFO?
NIFO = Net Investment in a Foreign Operation
360
N___ = Net Investment in a Foreign Operation
NIFO = Net Investment in a Foreign Operation
361
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency c__h flow h___e that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
362
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each pe____ of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
363
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NI__) into the parent financial statements,
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
364
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the pa____ financial statements,
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
365
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent fin______ statements,
a foreign currency gain or loss is recognized in shareholders’ equity
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
366
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a fo______ currency gain or loss is recognized in shareholders’ equity
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
367
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency g__n or loss is recognized in shareholders’ equity
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
368
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is re____ized in shareholders’ equity
(part of the cumulative translation account).
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
(part of the cumulative translation account).
369
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in sh________s’ equity
(part of the cumulative translation account).
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
(part of the cumulative translation account).
370
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
(part of the cumu______ translation account).
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
(part of the cumulative translation account).
371
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
(part of the cumulative translation ac_____t).
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the Net Investment in a Foreign Operation (NIFO) into the parent financial statements,
a foreign currency gain or loss is recognized in shareholders’ equity
(part of the cumulative translation account).
372
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon cons_______ each period of the NIFO into the pa____ financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
373
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the NIFO into the parent financial statements, a foreign cu_____y gain or loss is recognized in shareholders’ e____y (part of the cumulative translation account).
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
374
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is re______ed in sha_______s’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
375
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net In__________ Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
376
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or red___ this volatility in shareholders’ equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
377
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or reduce this v______ty in shareholders’ equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
378
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ e___ty.
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
379
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment H___e can be used to eli______ or reduce this volatility in shareholders’ equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
380
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or reduce this vo_____y in sha_______s’ equity.
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
381
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging in_________ in a Net Investment Hedge can either be a derivative instrument
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument
382
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a de_______ instrument (such as a foreign exchange forward contract)
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
383
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange for____ contract)
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
384
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exc_____ forward contract)
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
385
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward con____)
or a non-derivative instrument
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument
386
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative ins_______
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument
387
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-de________ instrument (such as a foreign currency denominated debt instrument),
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
388
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated d__t instrument),
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
389
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt inst_______),
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
390
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency deno_____ed debt instrument),
or a combination of a derivative and non-derivative
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative
391
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a com________ of a derivative and non-derivative under international accounting principles.
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under international accounting principles.
392
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under inte_______ accounting principles.
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under international accounting principles.
393
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under international accounting pri_____s.
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under international accounting principles.
394
Hedge Accounting
3. NET INVESTMENT HEDGE
The h___ing inst_______ in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under international accounting principles.
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under international accounting principles.
395
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a der______ instrument (such as a foreign exchange forward contract)
or a non-der______ instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under international accounting principles.
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract)
or a non-derivative instrument (such as a foreign currency denominated debt instrument),
or a combination of a derivative and non-derivative under international accounting principles.
396
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a comb_____ of a derivative and non-derivative under international acc____ing principles.
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
397
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
When deri_____ hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
398
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the eff_____ portion of the change in the fair value of the instrument is recognized in equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is recognized in equity.
399
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective po_____ of the change in the fair value of the instrument is recognized in equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is recognized in equity.
400
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the ch_____ in the fair value of the instrument is recognized in equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is recognized in equity.
401
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the f___ value of the instrument is recognized in equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is recognized in equity.
402
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the ins________ is recognized in equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is recognized in equity.
403
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is re______zed in equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is recognized in equity.
404
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is recognized in e__ity.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used,
the effective portion of the change in the fair value of the instrument is recognized in equity.
405
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
When derivative hedging instrument is used, the effe_____ portion of the change in the fair value of the instrument is rec_____ed in equity.
Hedge Accounting
3. NET INVESTMENT HEDGE
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
406
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ine______ portion is recognized immediately in profit or loss.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
407
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is re____ized immediately in profit or loss.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
408
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized im_______ly in profit or loss.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
409
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in p___it or loss.
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
410
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
Similarly, when non-deri_______ instrument is used, the foreign currency translation gain or loss is recognized in equity (as opposed to profit or loss).
Hedge Accounting
3. NET INVESTMENT HEDGE
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
Similarly, when non-derivative instrument is used, the foreign currency translation gain or loss is recognized in equity (as opposed to profit or loss).
411
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instr______ is used,
the foreign currency translation gain or loss is recognized in equity
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is recognized in equity
412
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the for____ currency translation gain or loss is recognized in equity
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is recognized in equity
413
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation g___ or loss is recognized in equity (as opposed to profit or loss).
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is recognized in equity (as opposed to profit or loss).
414
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is rec______ed in equity
(as opposed to profit or loss).
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is recognized in equity
(as opposed to profit or loss).
415
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is recognized in e__ity
(as opposed to profit or loss).
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is recognized in equity
(as opposed to profit or loss).
416
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is recognized in equity
(as o___sed to profit or loss).
Hedge Accounting
3. NET INVESTMENT HEDGE
Similarly, when non-derivative instrument is used,
the foreign currency translation gain or loss is recognized in equity
(as opposed to profit or loss).
417
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
Similarly, when non-derivative instrument is used, the foreign currency translation gain or loss is recognized in equity (as opposed to profit or loss).
Hedge Accounting
3. NET INVESTMENT HEDGE
A Net Investment Hedge is a specific type of foreign currency cash flow hedge that is used to eliminate or reduce the foreign currency exposure that arises from an entity’s Net Investment in a Foreign Operation (NIFO).
Upon consolidation each period of the NIFO into the parent financial statements, a foreign currency gain or loss is recognized in shareholders’ equity (part of the cumulative translation account).
A Net Investment Hedge can be used to eliminate or reduce this volatility in shareholders’ equity.
The hedging instrument in a Net Investment Hedge can either be a derivative instrument (such as a foreign exchange forward contract) or a non-derivative instrument (such as a foreign currency denominated debt instrument), or a combination of a derivative and non-derivative under international accounting principles.
When derivative hedging instrument is used, the effective portion of the change in the fair value of the instrument is recognized in equity.
The ineffective portion is recognized immediately in profit or loss.
Similarly, when non-derivative instrument is used, the foreign currency translation gain or loss is recognized in equity (as opposed to profit or loss).
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Hedge Accounting
The Net Investment Hedge
Measurement of Derivative
[Change in Fair Value]
Recognition [Net Investment
in Foreign Operation]
1) Effective -to-- (SHs’ Equity) -from- Foreign Currency
Portion Gain / Loss
l
V*
2) Ineffective --> Income Statement
Portion
*Amounts are subsequently transferred out of Shareholders’ Equity in the same period during which corresponding exchange gains or losses arising from the translation of the financial statements of the foreign operation are recognized in the net income.
Hedge Accounting
The Net Investment Hedge
Measurement of Derivative
[Change in Fair Value]
Recognition [Net Investment
in Foreign Operation]
1) Effective -to-- (SHs’ Equity) -from- Foreign Currency
Portion Gain / Loss
l
V*
2) Ineffective --> Income Statement
Portion
*Amounts are subsequently transferred out of Shareholders’ Equity in the same period during which corresponding exchange gains or losses arising from the translation of the financial statements of the foreign operation are recognized in the net income.
