A swap's status as an asset or liability depends on the movement in the payments under the swap. However, Accounting Standards Codification (ASC) 820, "Fair Value Measurement," requires companies to reflect a derivative at fair value in their financial statements. Thus, if a swap is covering a hedgeable risk, the gains and losses for the hedged items and the offsetting gains or losses for the instrument that qualifies as the hedge are recognized as earnings that offset one another, so long as the hedge program qualifies as a highly effective hedge contract. If an interest rate swap meets certain conditions, it may qualify as a "perfect" hedge and be eligible for simplified accounting.