Designating proxy hedges

The objective of IFRS 9 Hedge accounting is to represent, in the financial statements, the effect of an entity’s risk management activities. However, this does not mean that an entity can only designate hedging relationships that exactly mirror its risk management activities. In fact, in many cases entities will designate so called proxy hedges (i.e., designations that do not exactly represent the actual risk management). During the redeliberations leading to the final standard, the Board decided that proxy hedging is permitted, provided the designation is ‘directionally consistent’ with the actual risk management activities. The examples below are common proxy hedging designations. [IFRS 9 6.6.1(c)] Designating proxy hedges

The objective of IFRS 9 Hedge accounting is to represent, in the financial statements, the effect of an entity’s risk management activities. However, this does not mean that an entity can only 

The objective of IFRS 9 Hedge accounting is to represent, in the financial statements, the effect of an entity’s risk management activities. However, this does not mean that an entity can only designate hedging relationships that exactly mirror its risk management activities. In fact, in many cases entities will designate so called proxy hedges (i.e., designations that do not exactly represent the actual risk management). During the redeliberations leading to the final standard, the Board decided that proxy hedging is permitted, provided the designation is ‘directionally consistent’ with the actual risk management activities. The examples below are common proxy hedging designations. [IFRS 9 6.6.1(c)]

The objective of IFRS 9 Hedge accounting is to represent, in the financial statements, the effect of an entity’s risk management activities. However, this does not mean that an entity can only designate hedging relationships that exactly mirror its risk management activities. In fact, in many cases entities will designate so called proxy hedges (i.e., designations that do not exactly represent the actual risk management). During the redeliberations leading to the final standard, the Board decided that proxy hedging is permitted, provided the designation is ‘directionally consistent’ with the actual risk management activities. The examples below are common proxy hedging designations. [IFRS 9 6.6.1(c)]

The objective of IFRS 9 Hedge accounting is to represent, in the financial statements, the effect of an entity’s risk management activities. However, this does not mean that an entity can only designate hedging relationships that exactly mirror its risk management activities. In fact, in many cases entities will designate so called proxy hedges (i.e., designations that do not exactly represent the actual risk management). During the redeliberations leading to the final standard, the Board decided that proxy hedging is permitted, provided the designation is ‘directionally consistent’ with the actual risk management activities. The examples below are common proxy hedging designations. [IFRS 9 6.6.1(c)]

exactly represent the actual risk management). During the redeliberations leading to the final standard, the Board decided that proxy hedging is permitted, provided the designation is ‘directionally consistent’ with the actual risk management activities. The examples below are


discussed in section 3.6.3 above is here


Designating proxy hedges

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