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 the practice of matching gains or losses from hedging with losses or gains from the risk being hedged. This allows for a more accurate reflection of the economic realities of the hedging transaction in financial statements.

What Is "Hedge Accounting