Treatment of time value /forward points in derivatives
An entity is allowed to designate only the change in the intrinsic value of an option contract in a hedging instrument. Similarly an entity can also designate only the change in the spot value of a forward contract in a hedging instrument. In such cases, the time value of the option/forward points is accounted for depending upon the type of the hedged item that the option/forward contract hedges. The option/forward contract could be to either to hedge a transaction-related hedged item or a time-period-related hedged item.
The accounting treatment is given below:
Hedges of a net investment in a foreign operation
Accounting for the time value of options
Hedge effectiveness requirements
Discontinuance of hedge accounting
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
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
