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Hedging effectiveness

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Hedging effectiveness

  • This topic has 2 replies, 3 voices, and was last updated 11 years ago by AvatarMikeLittle.
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  • November 13, 2014 at 6:57 am #209515
    Avatarrameez13031988
    Participant
    • Topics: 42
    • Replies: 54
    • ☆☆

    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?

    November 13, 2014 at 12:26 pm #209599
    Avatara_c00l_h
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    Ias 39 gives 80 – 125 % range for effectiveness,
    note that it is changed in IFRS9 but that is not examinable for dec14 attempt

    November 18, 2014 at 10:09 pm #211133
    AvatarMikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23368
    • ☆☆☆☆☆

    Quarter up/quarter up is the range previously accepted as being effective

    I was sitting here looking in google to see if there were a link that I could send to you and then thought “Why can rameez himself not find an appropriate article” – so that’s what I’m going to recommend!

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