INTERNATIONAL ACCOUTNING

International Accounting



Hedge Accounting

Definition of a hedge

Hedging attempts to decrease the unpredictability formed by the frequent change of a financial tool's value, known as marking to market which creates major changes in profit and loss accounts. This is done by merging the hedge and the tool entries as one. This helps in reducing the unpredictability of an organization.

Definition of a derivative

Derivate is a financial tool which value depends on the price of other financial tools such as interest rates, index prices, etc. It is used a substitutive tool. The types of derivates are swaps, futures and options ...