Welcome to the IFRS 9 Financial Instruments, Part 3: Hedge Accounting e-learning module

This module covers the background, scope and principles relating to the general hedge accounting requirements of IFRS 9 and the application of this Standard. By completion of this module, you will be able to:

  • Understand that hedge accounting is voluntary and can only be applied prospectively
  • Outline the basic requirements that need to be met for hedge accounting to be applied
  • Identify eligible hedged items, hedged risks and hedging instruments
  • Explain the differences between the three types of hedging relationships (cash flow hedges, fair value hedges and net investment hedges) and give examples of circumstances in which each one can be applied
  • Interpret the requirements of the option to designate credit exposures at fair value through profit or loss
  • Produce journal entries for basic examples of each type of hedge
  • Account for the costs of hedging (time value of options, forward points and currency basis spreads) excluded from the designation
  • Apply the three hedge effectiveness criteria in simple scenarios
  • Describe the common sources of hedge ineffectiveness for each type of relationship and
  • Explain the differences between the measurement and assessment of hedge effectiveness

The duration of this module is about 2 hours and there is an assessment at the end of the module to test your knowledge.

Please click Download button to download the module.

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