How to confirm hedge accounting?

Confirmation shall be made according to the following steps:

1 To judge whether the hedging method is forward foreign exchange transaction, forward foreign exchange contract or foreign exchange option contract, there are generally hedging foreign currency assets and liabilities, hedging foreign currency commitments, hedging its foreign currency transactions and hedging its foreign currency net investment, and speculating with foreign exchange futures contracts.

2. For hedged foreign currency assets and liabilities, it is also necessary to confirm the Delta ratio:

Delta ratio = change in fair value of non-performing instruments/cumulative change in fair value of hedged items.

Only when the Delta ratio is between 0.8- 1.25 can it be treated as hedge accounting. The specific treatment methods can be divided into fair value hedging and cash flow hedging according to the changes of intrinsic value and overall fair value.

After that, I ignored a lot of words.

According to the business discussion at that time, we think there are still many immature local accounting standards that are not stipulated, such as speculation in the name of hedging, which needs to be solved by the financial department.