All of the following are true statements when measuring hedge effectiveness except:
A)Effectiveness means there is an approximate offset with the range of 80% to 125% of the changes in the fair value of the cash flows.
B)Effectiveness means there is an approximate offset in fair value to the risk being hedged.
C)A company may elect to choose from several different measures for assessing hedge effectiveness.
D)Effectiveness must be assessed at least annually when the company reports their annual financial statements.

Question

Quizplus · Accepted Answer

All of the statements are true except for statement D, which is false. Hedge effectiveness must be assessed at least every reporting period, not just annually when the company reports their annual financial statements.

All of the Following Are True Statements When Measuring Hedge