Hedges
What are the three types of hedges?
Fair Value, Cash Flow, and Net Investment
Does this update propose that forecasted transactions and hedged risk should be accounted for as the same thing? T/F
False, they are proposed to be distinct
What year did the board start meeting on this topic?
2018
Does PwC believe the change in hedge risk proposed will add complexity to an already complex accounting model? T/F
True
What does a Cash Flow Hedge entail an unrecognized firm commitment? T/F
False
Yes, they are both prospective and retrospective
When (m,y) was the last deliberation on this topic?
February, 2024
Does General Electric overall support the proposed changes?
Yes, GE supports most of the changes
Does a Net Investment Hedge entail an investment in domestic or foreign operations?
Foreign
With this update, would an entity be able to specify the variability in price only if the documentation was obtained before the forecasted transaction occured? T/F
False, an entity can specify regardless of whether the documentation was obtained before or after the forecasted transaction occurs
What was the topic of the recent board discussion?
Comment letters
Does American Bankers Association believe that the proposed changes will enhance hedge accounting?
No, they believe that a majority of the proposed changes will add more complexity to an already complex process.