R12 Hedge Accounting for Cash Flow

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According IFRS and

Hedge accounting is a technique that modifies the normal basis for recognising gains and losses (or revenues and expenses) associated with a hedged item or a hedging instrument to enable gains and losses on the hedging instrument to be recognised in profit or loss (or in OCI in the case of hedges of equity instruments at FVOCI) in the same period as offsetting losses and gains on the hedged item. Hedge accounting takes two forms under IFRS 9:

• Fair value hedge – recognising gains or losses (or revenues or expenses) in respect of both the hedging instrument and hedged item in earnings in the same accounting period.