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Finance & Banking vocabulary · Financial Statements

Hedge accounting

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, hedge accounting means: Accounting treatment that reflects a qualifying hedging relationship in the recognition of gains and losses.

In Turkish: riskten korunma muhasebesi

How it is used

An economic hedge does not automatically qualify; the applicable standard sets the conditions.

Example sentences

  1. The company documented the relationship before applying hedge accounting.

    Formal designation supports the requested accounting treatment.

  2. Hedge accounting changed where the derivative's valuation movements appeared.

    Recognition may align the hedge with the exposure being hedged.

Common collocations

  • apply hedge accounting
  • hedge accounting documentation
  • hedgeTo reduce the risk of losing money from changes in prices, interest rates or exchange rates, usually by taking an opposite position with derivatives.
  • derivativeA financial contract whose value depends on the price of something else, such as a currency, interest rate, share or commodity.

More terms: Financial Statements

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This page explains English vocabulary for learners. It is not financial advice.