Oanda corporation Revision 5

Economic hedges are transactions that hedge the value of:  

  a foreign currency asset or liability recorded on the balance sheet 

  the value of a firm commitment 

  the value of a forecasted transaction  

 

Changes in the value of the forex hedge must occur opposite to changes in the value of the recorded 

asset/liability, firm commitment, or forecasted transaction.  

Economic hedges include those that are designated for accounting purposes and those that are not 

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Forex Hedge Accounting Treatment  

OANDA’s FXConsulting 

 

for Corporations

   

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designated.  

Hedges that are not designated: If an economic forex hedge is not designated, properly documented, 

or effective, any change in its value must be recorded directly to the income statement. (However, the 

change in value of the forecasted foreign currency transaction may not be recognized in the earnings 

until a later reporting period.)