The FASB requires entities that hold or issue derivative instruments that are designated and qualify as hedging instruments to disclose information that allows users to understand in the case of both fair value and cash flow hedges, how the derivative instruments and the related hedged items are accounted for.

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This statement is true. The FASB (Financial Accounting Standards Board) does require entities that hold or issue derivative instruments designated as hedging instruments to disclose information about how these instruments and the related hedged items are accounted for, whether they are fair value or cash flow hedges. This disclosure is intended to provide users with a clear understanding of the entity's risk management activities and the impact of hedging on the financial statements.

The FASB Requires Entities That Hold or Issue Derivative Instruments