High School

What is hedge accounting, and what are the three types of hedges in AASB 139?

Answer :

Final answer:

Hedge accounting is a set of accounting principles that help companies manage the impact of changes in asset or liability values on financial statements. The three types of hedges in AASB 139 are fair value hedges, cash flow hedges, and hedges of a net investment in a foreign operation.

Explanation:

Hedge accounting refers to a set of accounting principles that allow companies to mitigate the impact of changes in the fair value of certain assets or liabilities on their financial statements. In AASB 139 (Australian Accounting Standards Board), the three types of hedges are fair value hedges, cash flow hedges, and hedges of a net investment in a foreign operation.

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