DefinitionsDefinitions

Definitions

8 The terms defined in AASB 13, AASB 9 and AASB 132 are used in this Standard with the meanings specified in Appendix A of AASB 13, Appendix A of AASB 9 and paragraph 11 of AASB 132. AASB 13, AASB 9 and AASB 132 define the following terms:

(a) amortised cost of a financial asset or financial liability;

(b) derecognition;

(c) derivative;

(d) effective interest method;

(e) effective interest rate;

(f) equity instrument;

(g) fair value;

(h) financial asset;

(i) financial instrument; and

(j) financial liability;

and provide guidance on applying those definitions.

9 The following terms are used in this Standard with the meanings specified.

Definitions Relating to Hedge Accounting

A firm commitment is a binding agreement for the exchange of a specified quantity of resources at a specified price on a specified future date or dates.

A forecast transaction is an uncommitted but anticipated future transaction.

A hedging instrument is a designated derivative or (for a hedge of the risk of changes in foreign currency exchange rates only) a designated non-derivative financial asset or non-derivative financial liability whose fair value or cash flows are expected to offset changes in the fair value or cash flows of a designated hedged item (paragraphs 72-77 and Appendix A paragraphs AG94-AG97 elaborate on the definition of a hedging instrument).

A hedged item is an asset, liability, firm commitment, highly probable forecast transaction or net investment in a foreign operation that (a) exposes the entity to risk of changes in fair value or future cash flows and (b) is designated as being hedged (paragraphs 78-84 and Appendix A paragraphs AG98-AG101 elaborate on the definition of hedged items).

Hedge effectiveness is the degree to which changes in fair value or cash flows attributable to a hedged risk are offset by changes in the fair value or cash flows of the hedging instrument (see Appendix A paragraphs AG105-AG113).

10-70 [Deleted by the IASB]