Net investment in a foreign operation hedge

RRadhalakshmi9y ago

Hello I have a question from hedge accounting. In the case of hedging net investment in a foreign operation, if we are hedging only a portion of the risk, what should be the accounting treatment of the unhedged potion?,i.e. should the gains/losses on the unhedged portion go to the P/L account or the OCI? Thanks.

P2-D2Tutor9y ago#1

Hi, If there is an unhedged portion then it will go to profit or loss similar to that in the cash flow hedge. Thanks

RRadhalakshmi9y ago#2

Hello Thanks for the reply. I came across a question which say that the net investment in the foreign subsidiary £750 and the foreign borrowing is £600, which will be used as a hedging instrument could you please explain the treatment for this under hedge accounting? Thanks.

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