Hedge accounting is a method of accounting for which the
A)gains and losses from a hedge are deferred until the hedge is completed.
B)debits and credits are managed to keep the cash account stable
C)derivatives revenues and expenses are recorded so as to exactly balance
D)gains and losses on derivatives are shown before the hedge is terminated
E)none of the above

Question

Quizplus · Accepted Answer

Hedge accounting allows companies to defer gains and losses from a hedge until the hedge is completed, making it easier to manage cash flows and financial statements. This method of accounting helps to reduce volatility in financial performance due to fluctuations in market prices.

Hedge Accounting Is a Method of Accounting for Which the