A hedge of a forecasted transaction is a cash flow hedge.

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A hedge of a forecasted transaction is a cash flow hedge under accounting standards such as International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). Cash flow hedges are used to manage financial risks associated with future cash flow volatility, such as changes in currency exchange rates, interest rates, or commodity prices. The goal of a cash flow hedge is to offset the impact of these risks on future cash flows and minimize the variability of reported earnings.

A Hedge of a Forecasted Transaction Is a Cash Flow