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in the event of unrecognized firm commitment to purchase item of PPE (f.v hedge), is the journal going to be Dr financial assets and Cr p/l with full gain on the instrument?
That’s a very hard question!
I would treat as cash flow hedge – Dr FA Cr OCI
Fair value hedge is horrible – Dr FA Cr P&;L AND Dr P&L Cr Firm commitment liability with the same number – it’s crazy.
If a candidate knew that I would eat my hat. It took me 30 years to get my head round it.
Would I worry about it – no!