Discontinuance of hedge accounting

Discontinuance of hedge accounting

As per the new requirements, hedge accounting cannot be voluntarily discontinued. Hedge accounting can be discontinued only if the hedge effectiveness requirements are not met or that the hedging instrument is liquidated. Even when the hedge effectiveness requirements are not met, the entity should adjust the hedge ratio through the process of rebalancing and continue with hedge accounting so long as the hedging relationship continues to meet the risk management objectives of the enterprise. When hedge accounting is discontinued, the hedged item would once again be valued at amortised cost. The carrying value of the hedged item would have been reduced or increased, as the case may be, by the value of the hedging instrument. Such carrying value would be amortised based on applying the effective interest rate method such that at maturity the carrying value would be equal to the maturity value of the financial asset or liability.

Ind AS Accounting Standards

What is a Cash flow hedge?

Hedges of a net investment in a foreign operation

Treatment of time value /forward points in derivatives

Accounting for the time value of options

Hedge effectiveness requirements

Disclosures in respect of hedge accounting

Hedging fixed rate debt instrument with IRS

Relationship between components – cash flow hedge

Accounting for net investment hedge – Only functional currency

Illustration of a net investment hedge by a parent entity

Rebalancing by changing the hedge ratio

Are RBI circulars relevant for ECL computation as per Ind AS 109?

Hedging a net position – cash flow hedge

Steps in a cash flow hedge

Equity derivatives and interest rate derivatives

Steps involved in fair value hedge accounting

Accounting for fair value hedge

Hedging instruments and hedged items

Qualifying criteria for hedge accounting

What is meant by Hedging & Hedge Accounting

Equity derivatives and interest rate derivatives

What is a fair value hedge?

Accounting for the forward element

Discontinuation of hedge accounting