The Financial Accounting Standards Board issued an exposure draft of a proposed standard on accounting for hedging activities.

The proposed statement is intended to simplify hedge accounting and provide increased comparability of financial results for entities to apply hedge accounting. It would eliminate the multiple methods of hedge accounting currently being used for the same transaction. The proposed standard also would require an entity to designate all risks as the hedged risk (with certain exceptions) in the hedged item or transaction to better reflect the economics of such items and transactions in the financial statements.

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