Which Statement Is Correct About Hedge Accounting

question 35

Multiple Choice

Which statement is correct about hedge accounting?

• A)Hedge accounting must be reported in profit or loss.
• B)Hedge accounting must be reported in OCI.
• C)The financial effects of the hedging item and instrument offset 100% in hedge accounting.
• D)It permits the hedging item and the hedging instrument to be recorded in the same way.

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Definitions:

Restrictive Covenant

A provision in a deed or lease restricting the actions the property's owner may take with the property.

Run with the Land

Legal terms or conditions that are attached to a piece of land and bind both current and future owners.

Binding

describes an agreement or contract that is legally enforceable and obligates the parties to its terms.

Original Parties

The initial entities or individuals who enter into a contract or agreement.