When using fair value hedging accounting for hedging, the gains or losses caused by changes in fair value are directly included in the current profits and losses; If the hedging instrument is a non-derivative instrument, the resulting gains or losses are still included in the current profit and loss. The gains or losses arising from the hedged items are also included in the current profits and losses, and the book value of the hedged items is adjusted. For example, 2065438+65438 in00+65438 in10+0, the book cost of an inventory product held by a production enterprise is 50 million, and the fair value is 55 million. If you sell it immediately at that time, you can make a profit of 5 million; The enterprise is expected to sell on June 30th, 20 10. Considering the decline of fair value at that time, enterprises will lose profits. In order to avoid the risk of fair value change of inventory products, the enterprise decided to hedge this business. Because the inventory products already exist, fair value hedging is adopted in accounting treatment. In the futures market, choose derivative futures with the same quantity and quality as the inventory products for sale, assuming that the futures market is 52 million. At 20 10, 1, the fair value of derivatives is zero, because the futures price has not changed at that time. 20 10 On June 30th, Company A sold its inventory products at a fair price of 45 million, which was less than the original fair value of 55 million 100000. At the same time, Company A buys a futures contract and closes its position, assuming that the futures price for buying and closing the position is 42 million, which is100000 compared with the futures price for newly opened position of 52 million. As Company A adopted hedging strategy to avoid the risk of changes in the fair value of inventory, the decline in the fair value of inventory did not adversely affect the original estimated gross profit of 5 million. The net profit and loss of hedging is zero. In this case, there is no "invalid hedging profit and loss", which is a completely effective hedging. Avoid the losses caused by price drop to enterprises.

Cash flow hedge accounting

Foreign exchange risks and expected transactions caused by exchange rate fluctuations can be hedged as cash flows. In cash flow hedging accounting, the part of the gains or losses of hedging instruments that is effectively hedged is directly recognized as owner's equity and reflected in a separate project; It is included in the owner's equity capital reserve account because it is mainly an expected transaction, which is different from fair value hedging accounting. Under normal circumstances, he only determines the changes caused by hedging instruments, and then transfers them to the current profit and loss when the hedged items are disposed of. The part of the gains or losses of the hedging instrument that is invalid for hedging is directly included in the current profit and loss. This can effectively control the behavior of some enterprises using hedge accounting to manipulate profits, and fully embody the principle of accounting prudence.