Under IFRS, UK GAAP incorporating FRS 26 (for accounting periods beginning before 1 January 2015), and new UK GAAP where a company adopts either FRS 101 or FRS 102 (for accounting periods beginning on or after 1 January 2015), a derivative can be accounted for as a fair value hedge, a cash flow hedge or a hedge of a net investment in a foreign operation.
Where a company uses cash flow hedging, any profits or losses arising on a derivative contract that are reflected in other comprehensive income, are included in computing its profits and losses for purposes of the derivative contracts legislation1. Accordingly, even if a derivative contract is a 100% effective
To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to Tolley+™ Research or register for a free trial
Web page updated on 17 Mar 2025 13:30