Hedge accounting
You'll learn how hedge accounting works and when to use it—a key technique for managing financial risk in your IFRS studies. This video covers the two main types of hedges (fair value and cash flow), the qualifying criteria you need to meet, and how to account for hedging instruments and hedged items.
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In this lesson
- 0:00 Introduction to Hedge Accounting
- 0:26 Designating Hedging Instruments and Items
- 1:01 Fair Value Hedges Explained
- 1:45 Qualifying Criteria for Hedge Accounting
- 2:25 Fair Value Hedge Accounting Treatment
- 3:17 Fair Value Hedge Worked Example
- 6:55 Cash Flow Hedges Explained
- 8:07 Cash Flow Hedge Reserve Treatment
About this lesson
You'll see a worked example showing how hedges offset losses in practice, and understand why the accounting treatment differs depending on what you're hedging. This is essential knowledge for Financial Reporting and Strategic Business Reporting papers, where hedge accounting questions test your ability to apply IFRS 9 principles to real scenarios.
Duration: 8m
Transcript
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