FASB Proposed Changes Foreign Currency Hedge Accounting


March 2017

Under the proposed guidance, companies with foreign currency hedging programs would be required to change the way they assess hedge effectiveness and measure and record any hedge ineffectiveness. The new guidance would allow companies to perform ongoing effectiveness assessments on a qualitative basis if the hedging relationship hasn’t changed and if hedge mismatches are not expected to occur. Quantitative effectiveness testing would continue to be required at inception of the hedging relationship.

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