In Order for a Fair Value Hedge to Receive Special

question 34

Multiple Choice

In order for a fair value hedge to receive special accounting treatment, the

• A)​derivative instrument must be held until it expires or is exercised.
• B)​criteria necessary for special accounting treatment must only be met at the inception of the hedge.
• C)​entity may designate the derivative instrument as a fair value hedge when it is determined the hedge is effective.
• D)​hedging relationship must be considered highly effective.

---

Definitions:

Companion Animal

An animal kept primarily for a person's company or entertainment rather than as a working animal, livestock, or laboratory animal.

School Authority

The power or right to enforce rules and make decisions within an educational institution.