Accounting for a cash flow hedge on first-time adoption
How will a cash flow hedge be accounted for on first-time adoption?
If the forecast transaction which is not highly probable is expected to occur, the deferred gains or losses are recognised in the cash flow hedge reserve. Such gains or losses that are recognised in the cash flow hedge reserve on first-time adoption of Ind AS 109 continues to remain there until the forecast transaction affects profit or loss or the forecast transaction is not expected to occur. When the forecast transaction is no longer expected to occur, the net cumulative gain or loss recognised in the cash flow hedge reserve is transferred to profit and loss account.
