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Risk Management Companies and Hedge Accounting

Author

Listed:
  • Sabin Armăşelu

    (Universiy of Craiova, Romania)

Abstract

The increasing use of derivatives for risk management of a company lately has led to the need to report on an actual basis as these instruments and regulate these operations accounting. This paper proposes a presentation of hedging transactions and their accounting evaluating the impact, in terms of accounting, risk management derivatives on a company. Hedges are often ineffective. Overcoming the ineffectiveness of hedging operations can be achieved by proper designation of the hedging relationship and create an appropriate method to demonstrate hedge effectiveness.

Suggested Citation

  • Sabin Armăşelu, 2014. "Risk Management Companies and Hedge Accounting," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 14(2), pages 5-12.
    • Handle: RePEc:pet:annals:v:14:y:2014:i:2:p:5-12
    as

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    File URL: http://upet.ro/annals/economics/pdf/2014/part2/Armaselu.pdf
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    References listed on IDEAS

    as
    1. Mian, Shehzad L., 1996. "Evidence on Corporate Hedging Policy," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 31(3), pages 419-439, September.
    2. Holger Daske & Luzi Hail & Christian Leuz & Rodrigo Verdi, 2008. "Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences," Journal of Accounting Research, Wiley Blackwell, vol. 46(5), pages 1085-1142, December.
    3. Nelson, James M. & Moffitt, Jacquelyn Sue & Affleck-Graves, John, 2005. "The impact of hedging on the market value of equity," Journal of Corporate Finance, Elsevier, vol. 11(5), pages 851-881, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    derivative; hedging; hedge accounting; financial assets; fair value;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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