Under IFRS, a Hedging Relationship Qualifies for Special Hedge Accounting

question 11

Essay

Under IFRS, a hedging relationship qualifies for special hedge accounting rules only if it meets five conditions.
Required:
Explain the conditions that must be met for a derivative to qualify for special hedge accounting. Identify what qualifies as a hedged item. Identify what qualifies as a hedging instrument. Outline the conditions required for a hedge to be effective.

---

Definitions:

Contingent Reward Behaviour

describes a leadership approach where the leader sets clear expectations and rewards followers for meeting those expectations.

Management By Exception

A management strategy where leaders only intervene when performance deviates from standards, allowing employees to work autonomously otherwise.

Charismatic Leaders

Individuals who possess a magnetic personality and the ability to inspire and motivate others through their vision, communication skills, and personal charisma.

Self-esteem Followers

Individuals who follow others based on a need for approval and validation to boost their own self-esteem.