If a derivative is effective in reducing a government's exposure to identifiable risks,the changes in the value of the derivative are reflected as investment gains or losses in the period that the value changes.

Question

Quizplus · Accepted Answer

Changes in the value of an effective derivative used for hedging are typically accounted for in other comprehensive income, not as investment gains or losses, unless it is a fair value hedge.

If a Derivative Is Effective in Reducing a Government's Exposure