SLS 8 - AC3102 Risk Reporting Analysis Student Led Seminar...

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AC°±²³ Risk Reporting ´ Analysis 8WXIJQW 1JI 8JPNQFU °± ² 1JILJ ''*HHRXQWNQL ± 9JFP ³ (+XN 3LX\JQ 3LRH 1F /FQJW 1NP ),MNF 1J 1RZ 0XFQ 1RQL 3NHROJ 9JR /NQL >>N 4QL /NF 1XN 9FN 1N 2NQ °
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Question ± +.[SOFNQ´ HRQHJSWXFOO\´ MRZ IRJV µN¶ ヒKFNU YFOXJ MJILJフ FQI µNN¶ ヒHFVM KORZ MJILJフ MJOS WR UJIXHJ NQHRPJ YROFWNONW\· ±
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Question ± /FNU ;FOXJ 1JILJ &&&Attempts to PNQNPN]J FHHRXQWNQL PNVPFWHM and UJIXHJ NQHRPJ YROFWNONW\ by requiring fair value gain or loss from both the hedging instrument and the MJILJI NWJP WR GJ UJHRLQNVJI NQ SURKNW RU ORVV during the financial accounting period²s³ for which the hedge is designated´ µ
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Question ± ),FVM /ORZ 1JILJ &&&Attempts to PNQNPN]J FHHRXQWNQL PNVPFWHM and UJIXHJ NQHRPJ YROFWNONW\ by requiring the portion of the gain or loss on the MJILNQL NQVWUXPJQW that is determined to be JKKJHWNYJ WR GJ UJHRLQNVJI NQ 4),2 and subsequently as part of cash flow hedge reserve´ .In a cash flow hedge¶ the hedged item is a highly probably transaction which has not been transacted and accounted for¶ and therefore¶ by allowing the gain or loss on the hedging instrument to be recognised in O((C.I until the transaction has been transacted¶ it reduces income volatility in the P·L ¸
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Question ³ ¹
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Question ³ Case Facts ± 4HWRGJU °¸[° ż Lion Ltd ²a Sgºincorporated company" functional»presentation currency is S¼³ SXUHMFVJV 72±¸¸´ ¸¸¸ RK 9NLJU (+MI VMFUJV listed in ''Bursa Malaysia´ ż Shares HOFVVNKNJI FV ''*/8 NQYJVWPJQWV ż (+RUURZV F ¹²PRQWM 72º¸¸´¸¸¸ ORFQ from ''Bank Malaysia´ ¹± *-JHJPGJU °¸[° ż Tiger ''Bhd’s shares are TXRWJI FW 72±±¸´¸¸¸· +.[HMFQLJ 7FWJV! ° October ±²x± ƚ RM °´½½ $""" S¼½´¸½ ³° )).December ±²x± ƚ RM °´½½ $""" S¼½´µµ ¾
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Question ³µa¶ ))Does +FRS µ FOORZ Lion Ltd to FSSO\ MJILJ FHHRXQWNQL KRU WMJ ¹ PRQWMV beginning ° October ±½x± ²assuming all other conditions for hedge accounting are met³$$$ ¿
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Question ³ µa¶ Yes¶ if Lion Ltd IJVNLQFWJV 72±¸¸´¸¸¸ RK WMJ GFQN ORFQ FV F MJILNQL NQVWUXPJQW to hedge the foreign exchange exposure of the investment in &&&A+FS shares for µ months from ° Oct ±½x± to µ° ))Dec ±½x± ż +FRS µ Para ¿± ! &&&A QRQ IJUNYFWNYJ KNQFQHNFO FVVJW»ONFGNONW\ may be designated as a hedging instrument for only a hedge of a KRUJNLQ HXUUJQH\ UNVN ż +FRS µ Para ¿¹ ! &&&A SURSRUWNRQ RK WMJ JQWNUJ MJILNQL NQVWUXPJQW´ PF\ GJ IJVNLQFWJI as the hedging instrument in a hedging relationship ²i´e´ RM °½½¶½½½ out of the total RM ¹½½¶½½½³ À
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Question ³ µa¶ 1JILJI 2WJP RM °½½¶½½½ of Tiger ''Bhd Shares ²&&&A+FS .Investment³ 1JILNQL 2QVWUXPJQW RM °½½¶½½½ of the µ Months Nonº))Derivative ''Bank Loan 1JILJI 7NVN +Fluctuations in +FV of the &&&A+FS Shares ))Due to ((Changes in +Foreign **Exchange Rate
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Question ³µb¶ &&&Assuming answer to ²a³ above is “Yes”¶ and Lion Ltd wishes to FSSO\ MJILJ FHHRXQWNQL´ prepare the MRXUQFO JQWUNJV QJHJVVFU\ WR UJHRUI WMJ MJILJ UJOFWNRQVMNS ²ignore
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  • Spring '16
  • Accounting, Forward contract, hedge accounting, AFS, Cash flow hedge

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