Accounting for hedging activities has never been easy, but by year’s end, if a proposal from the Financial Accounting Standards Board meets approval, it might get a little simpler.FASB has proposed an amendment to Statement 133, Accounting for Derivative Instruments and Hedging Activities. The proposed statement, Accounting for Hedging Activities, issued as an exposure draft, would eliminate most of the many methods of hedge accounting. The result: financial statements that are simpler, more transparent and more comparable.

“The board was dealing with a lot of implementation issues around hedge accounting, and a lot of users of financial statements were concerned that results relating to hedge accounting weren’t as transparent as they could be,” explained FASB assistant director of technical activities Kevin Stoklosa. “The board identified a number of areas that were causing the complexity and financial reporting issues, and they focused in on those.”

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