I just want to post my understanding learnt from the discussions with David here. Maybe it can be useful to the ones who does not have enough business knowledge like me.
Let's assume the company publishes balance sheet at year end, at which time all the assets and liabilities should be...
Even the FX futures position is to hedge the Plant Asset, as we are under a situation the liabilities is disconnected, it is still fully hedged. I don't think I quite understand "when the hedge doesn't work". When there is a loss on Plant Asset, it is offset by gain on FX position. That is...
Hi David, I am from an IT background and still feeling confused with the concepts.
I understand buying GBP futures hedged accounting risk. But why it subsequently incurs economic risk? The foreign asset is still backed up by a loan. If GBP rate rises, loss in loan can be covered by gains from...
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