Page 100 - F3 Integrated Workbook STUDENT 2019
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Chapter 4
2.4 Adoption of hedge accounting
Hedge accounting in practice
Hedge accounting can be adopted for any items for which cash
flows are highly probable.
e.g. cash flow hedging to cover probable foreign currency sales
over the next few years.
Reduced volatility
Hedge accounting enables an entity to offset gains/losses on
derivatives against losses/gains on another financial asset or
liability.
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