Using IFRS, hedge accounting allows the gain or loss on the hedge transaction to
A) be booked through net income.
B) be booked through other comprehensive income.
C) not be booked.
D) not be booked until the hedge closes.

Question

Quizplus · Accepted Answer

Under IFRS, hedge accounting allows the gain or loss on the hedge transaction to be booked through other comprehensive income. This is done to ensure that the financial statements accurately reflect the economic impact of the hedging relationship. Once the hedge is complete, the amount accumulated in other comprehensive income is then reclassified to the income statement.

Using IFRS, Hedge Accounting Allows the Gain or Loss on the Hedge