AASB 139 - Financial Instruments: Recognition and Measurement - July 2004
Hedges of a Net InvestmentHedges of a Net Investment
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Hedges of a Net Investment
102 Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the net investment (see AASB 121), shall be accounted for similarly to cash flow hedges:
(a) the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (see paragraph 88) shall be recognised in other comprehensive income; and
(b) the ineffective portion shall be recognised in profit or loss.
The gain or loss on the hedging instrument relating to the effective portion of the hedge that has been recognised in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment (see AASB 101 (revised 2007)) in accordance with paragraphs 48-49 of AASB 121 on the disposal or partial disposal of the foreign operation.