Hedging accounting refers to a specialized accounting profession that uses hedging accounting method to include the offset result of the fair value change of hedging instruments and hedged items into the current profit and loss in the same accounting period. Hedging refers to the agreement of both parties to buy or sell certain financial products (such as funds) at a fixed interest rate after a fixed term in the future. For example, suppose a financial futures contract. After six months, the buyer will be delivered a three-month certificate of deposit of 1W, and the interest rate will be set at 1%. That is, after 6 months, the buyer must buy this 1W, with a profit of 1%, and the seller must also sell it to the buyer. Hedging is to avoid interest rate risk, but it also eliminates the extra income of the buyer or seller. Hedging accounting method refers to the method of recording the offset results of changes in the fair value of hedging instruments and hedged items into current profits and losses in the same accounting period.

Hedging refers to the trading activities in which the futures market is regarded as a place to transfer the price risk, and futures contracts are used as a temporary substitute for buying and selling commodities in the spot market in the future, so as to insure the prices of commodities that they buy now or need to buy in the future. For example, in order to reduce the risk of lower crop prices at harvest time, a farmer sells crops harvested in the future at a fixed price before harvest.

hedging refers to trading the same kind of goods in the spot market and the futures market in the same amount but in opposite directions, or by constructing different combinations to avoid losses caused by future price changes.