It has been argued by some firms that IASB fair value accounting fundamentally changes the focus of risk management.Which of these is a way in which the focus may change?

Question

Quizplus · Accepted Answer

According to the argument presented, fair value accounting might lead to firms decreasing their hedging activities due to concerns about the impact on accounting profits. However, it may also lead to an increase in hedging for pension liabilities as these must now be recognized as liabilities on the balance sheet. Therefore, options B and C are both possible ways in which the focus of risk management may change under fair value accounting, making D the correct answer.

It Has Been Argued by Some Firms That IASB Fair