What is the hedge accounting?

HEDGE ACCOUNTING is the use of the right accounting techniques according to the statement of financial accounting standards (SFAS) 133. Generally, derivative tools are provided. Derivative tools need a basic price or rate - the method of measuring units - the amount of settlement and the provisions on the payment. One of the main quality of securing accounting is all derivative tools that are first reported on the real value of the company's financial statements. There are three types of securing securing fruits: real value, cash flow and live fences in foreign currency. Hedges of the real value attempts to reduce the risk of changes in the real value of assets or liabilities of the company. Cash flows try to reduce the risk against unpredictable changes in future incoming and outgoing cash flows. Ensuring a foreign currency to ensure changes in the value of a foreign currency.

Any change in the real value of the During period to ensure the real value is recorded in the income in the profit and loss statement. IcingThe flowing flows are divided into two categories: effective and ineffective parts. The accountants determine how to classify the hedge of cash flows based on whether the hedge has done a good job or poor work in reducing risk. Changes in the real value of the effective part of the securing of cash flows are reported in the profit and loss statement. Changes in the real value of ineffective parts of the securing of cash flows are also reported as other complex incomes that are not included in the income from the statement and loss.

Accounting categorizes fruiting bodies in foreign currency to three categories: cash flow, real value and net investment in providing foreign operations. The icing of foreign currency flows and the ensuring real value are trying to reduce the risks of foreign currency transactions. Account for changes in real value of hedges is used as cumulative translation settings.

The company must publish reasons for arrangement fromApproaching tools, context to understand their reasons for the use of a hedging tool and their strategy for holding the tool in the notes on the financial statements. The entity must also publish their risk management policy in the financial statements. The company must publish the amount of earnings if the hedge no longer qualifies as living fruits in real value in foreign currency. Making cash flows must publish the maximum time for which the company has used hedge of cash flows and the amount of earnings, when the living areas of cash flows no longer qualify as a hedge.

Damage is also a problem in the area of ​​securing accounting. Only ensuring the real value can be disturbed. First, the accounting of the provision should be used on any account for the current year. Then the person should check that the tool is disturbed - has a less real value than the accounting value. If the fair value is disturbed, then the company must use the accounting value.