A Hedge Is Defined by AASB 139 as an Action

question 76

True/False

A hedge is defined by AASB 139 as an action taken,whether by entering into a foreign currency contract or otherwise,with the objective of maximising the possible positive effects of movements in exchange rates.

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Definitions:

Discounted Note

A promissory note whose face value has been reduced to reflect the effect of interest that it will earn.

GAAP

Generally Accepted Accounting Principles, which are a set of accounting standards and practices used to prepare financial statements.

Financial Instruments

Contracts that give rise to both a financial asset of one entity and a financial liability or equity instrument of another entity.