The implementation of hedge accounting is focused to lower the earning volatility on the Corporation and to abide together with the matching with the principle. Moreover, you will discover some disadvantages in related with Hedge Accounting:
- the hedge connection must be greatly productive so as to qualify for hedge accounting
- higher monitoring fees incurred closely & constant monitoring
- higher documentation charges ( substantive documentations are expected to help the hedge)
These parts are discouraging the Corporation from adopting hedge accounting.
