Spread the word
If you have benefited from our materials, please spread the word so more students can benefit.
Donate
To help us keep materials up to do and add new content you can also donate
Reader Interactions
Comments
Leave a Reply
You must be logged in to post a comment.
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?
When change in hedgign instrument is $0.8m and change in item is $1m, there should be no ineffectiveness in the hedging, right?
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