To Classify an Arrangement as a Hedge,and Therefore to Apply

question 59

True/False

To classify an arrangement as a hedge,and therefore to apply 'hedge accounting',AASB 132 requires a set of strict conditions be met.

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Definitions:

Underapplied Overhead

Occurs when the allocated manufacturing overhead cost is less than the actual manufacturing overhead cost incurred, leading to a discrepancy that needs to be adjusted in the accounting records.

Overapplied Overhead

A situation where the estimated manufacturing overhead costs exceed the actual overhead costs incurred.

Underapplied Manufacturing Overhead

A situation where the allocated manufacturing overhead cost is less than the actual overhead cost incurred.

Estimated Total Manufacturing Overhead

The projected sum of all manufacturing costs (excluding direct labor and direct materials) expected to be incurred over a specific period.