Which of the Following Statements About Hedge Accounting Is Not

question 567

Multiple Choice

Which of the following statements about hedge accounting is not correct?

• A) A prerequisite for hedge accounting is that a hedging instrument is designated as an offset to changes in the fair value or cash flows of a hedged item.
• B) Hedge accounting enables gains and losses on a hedging instrument to be recognised in the income statement in the same period as offsetting losses and gains on the hedged item.
• C) If one of the criteria for hedge accounting is no longer met, there is an option to discontinue hedge accounting.
• D) Strict criteria must be met at inception and throughout the term of the hedge relationship in order for hedge accounting to be applied.

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