CFM27010 - Accounting for corporate finance: hedging: introduction
What is hedging?
Companies will often try and mitigate the risks that could impact upon the company바카라 사이트™s core business. The company will often enter into financial instruments which will be structured to minimise these risks.
In particular:
- The hedged item is the asset, liability or future transaction whose risk is being mitigated.
- The hedging instrument is the instrument used to mitigate the risk associated with the hedged item.
- A hedging relationship is where a company has a hedging instrument to mitigate the hedged item.