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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.

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 ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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