What is "hedge accounting?"
A)any record keeping related to purchase,sale,or valuation of derivatives
B)recording options and other derivatives on the Balance Sheet
C)matching gains or losses from hedging with losses or gains from the risk being hedged
D)using multiple accounting methods to offset the effect of foreign currency exchange

Question

Quizplus · Accepted Answer

Hedge accounting is a method of accounting where gains and losses from hedging activities are matched with the losses or gains from the risk being hedged. This ensures that the financial statements more accurately reflect the overall economic effect of risk management activities. Hedging involves using financial instruments, such as options and derivatives, to offset potential losses.

What Is "Hedge Accounting