Prospective effectiveness testing
Performed at inception and at each subsequent reporting date, demonstrating that the entity expects changes in the hedged item to be almost fully — nearly 100 per cent — offset by the hedging instrument.
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