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Hedging may get easier under new FASB accounting standard

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Jun 07, 2017

On June 7, 2017, the Journal of Accountancy published an article where they discuss how a new standard for hedge accounting that FASB expects to approve soon is designed to provide better information to investors and eliminate accounting obstacles that prevented some organizations from using hedge accounting.

Financial statement preparers told FASB that they had difficulties applying hedge accounting and that their risk management techniques are not aligned with the accounting under the current standard.

FASB Chairman Russell Golden said in a news release that the new standard will create better alignment between companies’ risk management activities and the accounting rules. The standard will better reflect the economic results of hedging in the financial statements and will simplify hedge accounting treatment.

After FASB approves the standard on the written ballot, it is expected to be issued in mid-August.

Review the press release on the Journal of Accountancy's website.

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