Which of the following is not a condition of accounting for hedge derivatives?
A) The derivative is minimally effective in offsetting changes in the cash flows or fair value related to the hedged item.
B) The derivative is properly documented as a hedge.
C) The derivative is used to hedge a cash flow exposure to foreign exchange risk.
D) The derivative is highly effective in offsetting changes in the cash flows or fair value related to the hedged item.
E) The derivative is used to hedge a fair value exposure to foreign exchange risk.

Question

Quizplus · Accepted Answer

For hedge accounting, the derivative must be highly effective, not minimally effective, in offsetting changes in cash flows or fair value related to the hedged item.

Which of the Following Is Not a Condition of Accounting