Which type of hedge requires the change in fair value of the hedged item due to the risk being hedged to be recorded as an adjustment to the carrying amount of the hedged item and recognized in profit or loss?
A. Cash flow hedge
B. Ineffective hedge
C. Net investment hedge
D. Fair value hedge
D. Fair value hedge
In a fair value hedge, the change in fair value of the hedged item due to the risk being hedged is recorded as an adjustment to the carrying amount of the hedged item and recognized in profit or loss.
