What accounting account does net exposure hedging profit and loss belong to

Answer: Profit and loss account.

The basic requirement of fair value hedging accounting is that regardless of the hedging Changes in the fair value of either the current-term instrument or the hedged instrument must be included in the current profit and loss.

(1) Setting up the hedging accounting account:

Separate hedging accounting requirements Set up three accounting accounts: hedging instruments (*** of the same type), hedged items (*** of the same type), and hedging profits and losses (profit and loss). ***Debit balances of similar accounts represent assets, and credit balances represent liabilities.< /p>

The accounting treatment after the change in the fair value of the hedging instrument is:

Debit: Hedging instrument

Credit: Hedging profit and loss/Fair value change profit and loss

Or make the opposite entry.

Accounting for hedged items:

Debit: hedged item

Credit: designated as a hedged item Related assets (book value)

Debit: hedged items

Credit: hedging gains and losses

Or make the opposite entry.

If one of the following situations occurs, the enterprise should no longer handle it in accordance with the above provisions:

① The hedging instrument has expired, been sold, the contract has been terminated, or has been exercised. The hedging instrument has been rolled over or has been arbitraged by another item. When a futures instrument is replaced, if the extension or replacement is part of the hedging strategy stated in the company's formal written documents, it will not be treated as expired or the contract has been terminated.

② The hedging no longer meets this standard The stipulated conditions for applying the hedging accounting method.

③The enterprise revokes the designation of the hedging relationship.

What are the classifications of hedging?

The classification of hedging includes fair value hedging, cash flow hedging, and overseas operating net investment hedging.

The concept of hedging refers to the way enterprises manage foreign exchange risk, interest rate risk, price risk, and credit risk. Risk management activities that designate financial instruments as hedging instruments for risk exposures caused by specific risks such as hedging instruments so that changes in the fair value or cash flow of the hedging instrument are expected to offset all or part of the changes in the fair value or cash flow of the hedged item. (For example: using commodity futures for hedging, banks signing foreign currency option contracts for foreign exchange risk hedging, etc.).

After studying the professional part above, we found out what accounting is for net exposure hedging gains and losses. As for the subject, it turns out that it is indeed a profit and loss subject. If a company has a hedging tool, it may be familiar with it. It is not difficult to understand the accounting entries of the hedged items. Friends who are not yet able to learn it can use examples to assist their understanding.< /p>