Question: Hedge effectiveness must be documented before a particular hedge qualifies for hedge accounting. Describe the most common approaches used to determine hedge effectiveness and when

Hedge effectiveness must be documented before a particular hedge qualifies for hedge accounting. Describe the most common approaches used to determine hedge effectiveness and when they are appropriate. In each of the approaches, when would a particular hedge not be considered effective?

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Hedge effectiveness involves assessing how well the hedge mitigates the gains or losses of the asset ... View full answer

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