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Different hedge types are permitted under hedge accounting. Flex Finance supports the creation of
- Cash Flow Hedges
A future cash flow that is safeguarded against certain risks that might affect profit or loss is defined as a cash flow hedge.
A typical example of fair value hedges and cash flow hedges.a cash flow hedge is the safeguarding of interest payments for a variable-rate bond by a receiver interest rate swap which entails transforming the future variable interest payments into payments with a fixed amount.
The accounting practice in the Jabatix Finance Hedge Manager for hedged items and hedging instruments in a cash flow hedge fulfils the requirements for Hedge Accounting under IFRS. The hedged item is still valued and accounted for in accordance with the regulations in force while the hedging instrument is designated at full fair value and is disclosed at this value on the balance sheet.
- Fair Value Hedges
Safeguards against different types of risk can be implemented for one hedge. Jabatix Finance supports hedging against the following types of risk:
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