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While it is possible for an instrument indexed to the company’s own stock to be a hedge, the criteria for hedge accounting are strict, and must be met and formally documented PRIOR to entering into the hedging arrangement. A hedging strategy that involves an instrument indexed to the entity’s own stock would likely we used to hedge another instrument indexed to the company’s own stock such as stock appreciation rights or similar phantom stock agreement.

The hedge accounting module for this site is under development. lease refer to ASC 815-20, 815-25, 815-30 and 815-35 for accounting guidance applicable to hedging transactions.

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