Cash Flow Hedge: Forecast EUR Purchase, OCI Reserve & Reclassification
This lesson is part of the course
In this lesson
You follow Strandvik Instruments's FX forward for a forecast EUR 4m purchase from trade date to sale of the components: fair value, OCI reserve, journal entries and the hedged cost that finally reaches profit.
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Lessons in this course
- Why Hedge Accounting? Profit Volatility with and without It Locked
- Fair Value Hedge: Fixed-Rate Debt Swapped to Floating Locked
- Cash Flow Hedge: Forecast EUR Purchase, OCI Reserve & Reclassification Locked
- The Lower-of Test: Splitting the Effective and Ineffective Portion Locked
- Effectiveness Testing: Dollar-Offset 80–125% and Regression with SLOPE & RSQ Locked
- Hedge Ratio and Rebalancing: Proxy Hedging with SLOPE Locked
- Net Investment Hedge (Simplified): EUR Loan vs EUR Subsidiary Locked
- Hedge Disclosures and the OCI Reserve Roll-Forward (with Waterfall Chart) Locked