Hedging criteria and hedge effectiveness – ACCA (SBR) lectures
Reader Interactions
Comments
Leave a Reply
You must be logged in to post a comment.
Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
20% off ACCA & CIMA Books
OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>
there is no video for ” disclosure” part
Hi Chris, great great lecture. This was very easy to understand. I have one question – in chapter 2 in the SPLOCI, OCI shows INeffective element of gain/loss on cash flow hedge – I’m assuming this is a typing error and it is Effective gain/loss ?
god bless you!
Amazing, thank you
So beautifully explained. God bless you..!
Thank you
What will be the treatment of the difference of $.2 million in the under hedged illustration , are we suppose to take it through p/l?
No.it goes to OCI. Only if the hedge is overeffective, the overeffective portion go to PL under cashflow hedges
When change in hedgign instrument is $0.8m and change in item is $1m, there should be no ineffectiveness in the hedging, right?
Yes. There is no ineffectiveness in this case. Just that the risk has not been sufficiently hedged with hedge instrument
Thanks Chris.
Hi Chris,
In the illustration for under hedge, the item had a gain of 1m – but you mentioned to debit Asset only by 0.8m. What happens to the balance of 0.2m?
I don’t think anything is done with the 0.2m until the cash flow happens. When the cash flow occurs, the 1m loss goes to P&L and the 0.8m that was in OCI gets transferred to P&L.
Hi Chris,
On the hedge accounting effectiveness, which is it applicable to?
If cash flow hedge, will we know the cash flow fv to compare to?
If FV hedge, why we then need to record the instrument’s mtm to oci for the effective part?
I suppose its for cash flow hedge isnt it?
Thanks!
Am I missing something or are these not in the notes? As with the examples in the previous hedging videos. If they’re not in the notes, why? Not really complaining but I would really like to understand, because it means we need to take extra notes, which is an unnecessary move since you could’ve easily added them in the notes.
Calm down fella
The resources on this page are completely free, on top of that you can get discount codes for study materials with ACCA approved providers. Are you actually complaining that you have to take some notes?