Hedge accounting
Financial Dictionary — IFRS
Definition
A method to match gains and losses on hedging instruments with the hedged item.
Common Uses
- Used when applying IFRS/IAS requirements for recognition, measurement, presentation, or disclosure.
- Used to justify accounting treatments in working papers and financial statement notes.
- Used to justify accounting treatments in working papers and financial statement notes.
Practical Example
- Example: When preparing year-end reporting, management applies **Hedge accounting** to determine the correct IFRS treatment and disclosures.
Why This Term Matters
- Why it matters: Ensures compliance with IFRS, improves comparability across periods and entities, and reduces financial reporting risk.