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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Hedging effectiveness
cash flow hedge of a highly probable asset purchase: why is in a hedging situation when the hedging instrument has a gain of say 8 and the hedged item has a unrecognised loss of 10 i.e gain is lower than loss but still it is referred to as a FULLY EFFECTIVE HEDGE?
Ias 39 gives 80 – 125 % range for effectiveness,
note that it is changed in IFRS9 but that is not examinable for dec14 attempt
Quarter up/quarter up is the range previously accepted as being effective
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