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SAP C_S4FTR_2023 Exam - Topic 1 Question 44 Discussion
Actual exam question for
SAP's
C_S4FTR_2023 exam
Question #: 44
Topic #: 1
[All C_S4FTR_2023 Questions]
Topic #: 1
You have customized the system for hedge accounting under IFRS.During period-end activities, which of the following amounts of the hedging instrument (HI) does the system post to equity (OCI)?
Suggested Answer:
A
Under IFRS, the effective portion of the gain or loss on a cash flow hedge is recognized in other comprehensive income (OCI). This is done to match the timing of the recognition of the gain or loss on the hedged item, which is also recognized in OCI. The non-effective portion of the gain or loss on the hedging instrument is recognized in profit or loss.
For fair value hedges, the entire change in fair value of the hedging instrument is recognized in profit or loss. This is because the hedged item is also recognized at fair value in profit or loss.
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