Hedge Accounting
Accounting glossary · Understand, connect, apply
Hedge accounting reflects qualifying risk management relationships in financial reporting by linking a hedging instrument with an identified hedged item or exposure.
Example
An exporter documents a qualifying currency forward against a highly probable foreign-currency sale so that the financial statements reflect the relationship.
Remember the difference
An economic hedge can exist without hedge accounting. Designation, documentation and effectiveness criteria matter under IFRS 9.
Browse the accounting glossary · Read the IFRS Foundation reference
Prepared with AI assistance. Examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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