FAR 6 - M3 DERIVATIVES AND HEDGE ACCTG Flashcards
1
Q
fair value hedge
A
gains or loss from hedging instrument and offsetting gains or loss on the hedged item are reported in IS in the same acctg period
2
Q
Cash flow hedge
A
effective portion - OCi
ineffective portion - IS
3
Q
Purpose of hedging
A
to protect investors in their exposure to risk if an asset in their portfolio is subject to sudden price decline
