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“hedge accounting is only relevant when the gains/losses on instrument and item are recognised in different periods or different financial statements”
sir this sentence is part of first lecture video based on hedge accounting. And to me it sounds like Paradox! won’t hedge accounting be irrelevant if hedged item movement is in one period and FV movement in hedging instrument in other?
Don’t worry too much about hedge accounting.
Purpose is to prevent mismatches when gains on one item are in P&L and losses on the other are in OCI (or sometimes where things are dealt with in different accounting periods.
All you need:
FV hedge – remeasure hedged item and hedging instrument – gains / losses to P&L (usually)
CH hedge – remeasure hedging instrument – gains / losses to OCI
Wait until you see it in questions, then ask me – it’s no longer examined in theoretical terms.
Keep it simple.