Which One of the Following Statements Is Incorrect? Hedge Accounting

question 478

Multiple Choice

Which one of the following statements is incorrect? Hedge accounting of an existing position no longer applies when:

• A) the trader acquires additional exposure in the hedged item.
• B) the hedging instrument is sold, terminated or exercised.
• C) the hedged item is sold or settled.
• D) a hedge fails the effectiveness test.

Understand the obligations and liability of parties involved in negotiable instruments.

Identify and differentiate between real and personal defenses applicable to negotiable instruments.

Comprehend the rights and requirements to become a holder in due course.

Recognize the impact of mental incompetence, duress, and fraud on the enforceability of negotiable instruments.

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Definitions:

Accounting Standard AASB 127

An Australian Accounting Standard related to the preparation and presentation of consolidated and separate financial statements.

AASB 127

An accounting standard issued by the Australian Accounting Standards Board that outlines the accounting and reporting principles for investments in associates and joint ventures.