Which of the Following Statements About Hedge Accounting Is Not

Multiple Choice

Which of the following statements about hedge accounting is not correct?

A) A prerequisite for hedge accounting is that a hedging instrument is designated as an offset to changes in the fair value or cash flows of a hedged item.
B) Hedge accounting enables gains and losses on a hedging instrument to be recognised in the income statement in the same period as offsetting losses and gains on the hedged item.
C) If one of the criteria for hedge accounting is no longer met, there is an option to discontinue hedge accounting.
D) Strict criteria must be met at inception and throughout the term of the hedge relationship in order for hedge accounting to be applied.