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Hedge accounting
At the date of sale, the following accounting entries are made:
The sale is recorded:
Dr Receivable or cash $9,136,000
Cr Revenue $9,136,000
The movement of the value of the derivative is included in P&L (technically via
OCI and then recycled):
Dr Derivative (Financial asset) $48,000
Cr P&L $48,000
The previous period’s gain on the derivative that was taken to OCI is now
recycled to P&L:
Dr OCI $752,000
Cr P&L $752,000
The derivative is realised in cash:
Dr Cash $912,000
Cr Derivative (Financial asset) $912,000
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