Oanda corporation Revision 5

Types of Hedged Exposures 

Prior to initiating a forex hedge and designating the hedge for special accounting treatment, you will 

need to capture and evaluate data on the foreign currency exposure, which typically falls into the 

following categories: 

  foreign currency cash flows of a recognized asset or liability (recorded on the balance sheet),  

  a firm commitment (not recorded on the balance sheet), 

  a highly probable forecasted foreign currency transaction,  

  a forecasted foreign currency intercompany transaction, or 

  the net investment in a foreign operation. 

 

A summary table of the types of hedged exposures and the applicable forex hedges follows. Each has 

its own accounting treatment, which will be discussed later in the document.