What question did this study set out to answer?

The aim is to address the FASB's questions on hedging and propose suitable accounting practices.

June 15, 2026

Response to the FASB Discussion Document "Accounting for Hedging and Other Risk- adjusting Activities: Questions for Comment and Discussion"

Key Points

The aim is to address the FASB's questions on hedging and propose suitable accounting practices.
Responses provided by the American Accounting Association to FASB's discussion document.
Recommendations involved a mark-to-market hedge accounting model.
Assessment of required changes to current historical cost accounting practices.
The AAA committee advocates for the adoption of a mark-to-market hedge accounting model.
Full adoption would require changes to report at fair value instead of historical costs.
It would also necessitate recognizing certain transactions currently excluded under existing models.

Abstract

Abstract The article presents the American Accounting Association's answers to the questions posed by the Financial Accounting Standards Board on hedging and other risk-cutting activities. It is reported here that the AAA committee believes that the best approach for hedging activities is a mark-to-market hedge accounting model. It is noted, however, that a full adoption of this approach would involve two fundamental changes to the traditional historical cost accounting model: (1) a change to reporting at fair recognized at other than fair value, and (2) a recognition of certain transactions in the financial statements not recognized under the current accounting model.

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Cite This Study

Barth et al. (Wed,) studied this question.

synapsesocial.com/papers/6a2f982ba1cfeec490829326 https://doi.org/https://doi.org/10.2308/ah-9503212547

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