Derivatives & Hedge Accounting

Read time: ~5 minutes

Derivative = underlying + notional, little/no initial net investment, net settlement
All derivatives on balance sheet at fair value
Fair value hedge → earnings; Cash flow hedge → OCI (reclassify later); Net investment hedge → OCI/CTA
No designation/documentation at inception → everything to earnings
Hedging a recorded value = FV hedge; hedging future cash flows = CF hedge