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Hello, In my view, neither transaction can be designated as a hedged item under a net investment hedge. That's because in both cases the hedged items are forecast transactions, whereas the hedged item in a net investment hedge should be the net assets of a foreign operation that are included in the ...

I share the same opinion. Only bifurcate EDs that are not closely related. But I appreciate that a literal interpretation of B4.3.4 may lead to a different conclusion. Thanks!

That is a good point, but paragraph B4.3.8 (d) specifically addresses embedded foreign currency derivatives, whereas B4.3.8 (b) seems to address caps and floors only on interest rates and asset prices. It seems that the foreign currency risk in non-financial instrument contracts has a special treatm...

Hello, IFRS 9 B4.3.4 tell us that multiple embedded derivatives in a single hybrid contract are treated as a single compound embedded derivative, unless the risks they relate to are different, in which case different risk exposures are accounted for separately. Question is -- is this only applicable...

How would a Forward have a Nil value even if it was entered into at FV ? You would have a derivative asset and an obligation to pay, these would offset but are surely separate? A Swap I agree, so what would you book day 1? Dr Asset Cr payable, and Dr receivable Cr Liability? The fair value of a for...

Theoretically you do have to calculate ECL on cash and cash equivalents, but in practice you may choose not to because the impact should be immaterial (a characteristic of a C&CE is that it should be subject to insignificant changes in value, and that includes credit risk). However, if a substan...

You do not have to recognize the asset and liabilities with respect to the notional amount of the derivative. What you carry on your balance sheet is the fair value of the derivative (which is net of receive and pay legs). In absence of any hedge accounting, the fair value changes go to P&L and...

It is an embedded derivative, but it doesn't have to be bifurcated if the functional currency of the supplier is the USD or if these transactions are commonly denominated in USD in SA (assuming that there are not other features in the contract). Otherwise, it has to be bifurcated and accounted for s...