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Difference between derivatives accounting and hedging

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Difference between derivatives accounting and hedging

Viewing 2 posts - 1 through 2 (of 2 total)
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  • November 28, 2017 at 5:59 pm #418726
    Arun
    Member
    • Topics: 16
    • Replies: 26
    • ☆

    Hi,

    In financial instruments, what is the difference between the accounting for derivatives and hedging as apparently they both look the same?

    Regards.

    November 28, 2017 at 10:18 pm #418759
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7060
    • ☆☆☆☆☆

    Hi,

    It depends on the use of the derivative as a hedging instrument. If it is in a fair value hedge then yes the treatment is the same. If it is in a cash flow hedge then the treatment is different.

    Thanks

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