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Proposal to amend hedge accounting guidance

This bulletin discusses the guidance in the proposed ASU, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which would improve how the economic results of an entity’s risk management activities are portrayed in the financial statements and simplify the application of the current hedge accounting guidance. The proposed ASU would better align an entity’s risk management activities and financial reporting for hedging relationships, by expanding and refining hedge accounting for both nonfinancial and financial risk components and by aligning the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements.