Accounting mismatch
The problem hedge accounting solves — a derivative measured at fair value against an underlying exposure measured at actual cost, so that an economically neutral hedge produces a loss in one year and a gain in another.
This one is not written up yet
The definition above is the short version. A full explanation — how it works, a worked example and the exam traps — is still being written. In the meantime the chapter below covers it in context.
Written up from the same chapter
Where this is taught
Free preparation for NISM Series XVI← All terms