Documentation that constitutes a financial instrument as a hedging instrument must include:
A) how the entity will assess the effectiveness of the hedging instrument.
B) the nature of the risk being hedged.
C) the risk management objective and strategy.
D) all of the given answers.

Question

Quizplus · Accepted Answer

All of the given options are necessary components of documentation that constitute a financial instrument as a hedging instrument. The entity must explain how it will assess the effectiveness of the hedging instrument, the nature of the risk being hedged, and the risk management objective and strategy.

Documentation That Constitutes a Financial Instrument as a Hedging Instrument