Consider our requirement to provide ‘true’ accounting information (the ‘true and fair’ requirement). Required: a)Explain how cash flow hedge accounting allows gain and losses to be recorded in a variety of places (you are not also required to explain where gains and losses are recorded with fair value hedge accounting or with net investment hedge accounting). b) Present your perspectives on whether hedge accounting is consistent with this overarching requirement for ‘truth’. Come to your balanced overall perspective/conclusion on whether hedge accounting is in alignment with the overarching requirement to present ‘true’ financial statements.
Consider our requirement to provide ‘true’ accounting information (the ‘true and fair’ requirement). Required: a)Explain how cash flow hedge accounting allows gain and losses to be recorded in a variety of places (you are not also required to explain where gains and losses are recorded with fair value hedge accounting or with net investment hedge accounting). b) Present your perspectives on whether hedge accounting is consistent with this overarching requirement for ‘truth’. Come to your balanced overall perspective/conclusion on whether hedge accounting is in alignment with the overarching requirement to present ‘true’ financial statements.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter11: Risk-adjusted Expected Rates Of Return And The Dividends Valuation Approach
Section: Chapter Questions
Problem 2QE
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Consider our requirement to provide ‘true’ accounting information (the ‘true and fair’ requirement). Required:
a)Explain how cash flow hedge accounting allows gain and losses to be recorded in a variety of places (you are not also required to explain where gains and losses are recorded with fair value hedge accounting or with net investment hedge accounting).
b) Present your perspectives on whether hedge accounting is consistent with this overarching requirement for ‘truth’. Come to your balanced overall perspective/conclusion on whether hedge accounting is in alignment with the overarching requirement to present ‘true’ financial statements.
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