IMPLEMENTATION OF THE DOLLAR OFFSET METHOD IN THE EFFECTIVENESS TESTS ACCORDING TO HEDGE ACCOUNTING OF DERIVATIVE PRODUCTS
Journal Title: Muhasebe ve Vergi Uygulamaları Dergisi - Year 2017, Vol 10, Issue 3
Abstract
The purpose of this study is to examine the effectiveness tests and methods to be performed according to the Turkish Accounting Standard (TAS) 39 in the hedge accounting. The standard requires hedge to be effective in order to be able to apply the hedge accounting. Hedge effectiveness must be evaluated at the inception of hedge and then monitored at every three months (interim) or at least each balance-sheet date. TAS 39 requires two separate tests; a prospective test and a retrospective test but doesn’t provide specific guidance about how effectiveness tests are performed. In practice, “Critical Terms”, “Dollar-Offset”, “Regression Analysis” or “Volatility Risk Reduction” methods are used assessing hedge effectiveness. In the application part of the study, a bank’s credits provided and forward transactions are tested for effectiveness under hedge accounting employing “Dollar Offset” method.
Authors and Affiliations
Ali İhsan KAYAALP, İlker KIYMETLİ ŞEN
Keywords
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- EP ID EP260798
- DOI 10.29067/muvu.333070
- Views 111
- Downloads 0
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