PFRS 9 Comprehensive Hedge

Accounting Summary
Type of Hedge Hedged Item Hedging Accounting PFRS 9
Instrument Treatment Reference

Fair Value Assets or Derivatives Hedging PFRS 9, Section

Hedge liabilities (e.g., interest instrument: 6.2
recognized at rate swap, Changes in fair
fair value (e.g., forward, value of the
fixed-rate bond, option) or non- hedging
receivable, derivative instrument are
payable) financial recognized in
instruments P&L.
(e.g., fixed-rate Hedged item:
debt) Changes in fair
value of the
hedged item
(due to the
hedged risk)
are recognized
in P&L.
Ineffectiveness:
Recognized in
P&L
immediately.

Cash Flow Forecasted Derivatives Hedging PFRS 9, Section

Hedge transactions (e.g., forward instrument: 6.3
(e.g., forecasted contract, Changes in fair
sales, option, interest value of the
purchases, rate swap) or hedging
future interest non-derivative instrument are
payments, instruments recognized in
forecasted (e.g., foreign OCI.
foreign currency loan) Hedged item:
currency Changes in fair
payments) value of the
forecasted
transaction are
reclassified
 from OCI to
P&L when the
transaction
affects P&L
(e.g., when cash
flows are
realized).
Ineffectiveness:
Recognized in
P&L
immediately.

Cash Flow Firm Forward Hedging PFRS 9, Section

Hedge commitment contract, instrument: 6.3
(e.g., firm futures, or Changes in fair
purchase options to value of the
agreement) hedge against hedging
price or instrument are
currency recognized in
fluctuations. OCI.
Hedged item:
Changes in fair
value of the
forecasted
transaction are
reclassified
from OCI to
P&L when the
transaction
affects P&L
(e.g., when cash
flows are
realized).
Ineffectiveness:
Recognized in
P&L
immediately.

Cash Flow Fixed-to- Interest rate Hedging PFRS 9, Section

Hedge variable swap (to swap instrument: 6.3
interest rate fixed rate for a Changes in fair
(e.g., fixed-rate floating rate) value of the
debt converted hedging
to floating-rate instrument are
 debt) recognized in
OCI.
Hedged item:
Changes in fair
value of the
forecasted
transaction are
reclassified
from OCI to
P&L when the
transaction
affects P&L
(e.g., when cash
flows are
realized).
Ineffectiveness:
Recognized in
P&L
immediately.

Cash Flow Variable-to- Interest rate Hedging PFRS 9, Section

Hedge fixed interest swap (to swap instrument: 6.3
rate (e.g., floating rate for Changes in fair
variable-rate a fixed rate) value of the
debt converted hedging
to fixed-rate instrument are
debt) recognized in
OCI.
Hedged item:
Changes in fair
value of the
forecasted
transaction are
reclassified
from OCI to
P&L when the
transaction
affects P&L
(e.g., when cash
flows are
realized).
Ineffectiveness:
Recognized in
P&L
 immediately.

Hedge of Net Net investment Derivatives Hedging PFRS 9, Section

Investment in a foreign (e.g., forward instrument: 6.5
operation (e.g., contract, Changes in fair
foreign currency swap) value of the
subsidiary, or non- hedging
branch, joint derivative instrument are
venture) financial recognized in
instruments OCI.
(e.g., foreign Hedged item:
currency loan) Changes in the
foreign
exchange rate
for the net
investment are
recognized in
OCI (foreign
currency
translation
reserve). When
the subsidiary
is sold or
disposed of,
this is
reclassified to
P&L.
Ineffectiveness:
Recognized in
P&L
immediately.