A foreign exchange hedge (FOREX hedge) is a method used by companies to eliminate or hedge foreign exchange risk resulting from transactions in foreign currencies (see Foreign exchange derivative). This is done using either the cash flow or the fair value method. The accounting rules for this are addressed by both the International Financial Reporting Standards (IFRS) and by the US Generally Accepted Accounting Principles (US GAAP).
Read more about Foreign Exchange Hedge: Foreign Exchange Risk, Hedge, Do Companies Hedge?
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