Document ID: chunk:federal_register_of_legislation:C2025C00029:section:12:p7
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 12 (pt 7/43)
Character Range: 3962799–3965596

having regard to:
 (a) your documented risk management practices and policies; and
 (b) your record keeping practices; and
 (c) your accounting systems and controls; and
 (d) your internal governance processes; and
 (e) the circumstances surrounding the mistake or inadvertence (including the steps (if any) taken to correct or address the mistake or inadvertence and the steps (if any) taken to prevent a recurrence); and
 (f) the extent to which the requirements of paragraphs 230‑335(1)(b) and (c) have been met; and
 (g) the objects of this Subdivision.

230‑350  Derivative financial arrangement and foreign currency hedge

Derivative financial arrangement
 (1) A derivative financial arrangement is a *financial arrangement that you have where:
 (a) its value changes in response to changes in a specified variable or variables; and
 (b) there is no requirement for a net investment, or there is such a requirement but the net investment is smaller than would be required for other types of financial arrangement that would be expected to have a similar response to changes in market factors.
Note: Paragraph (a)—a specified variable includes an interest rate, foreign exchange rate, credit rating, index or commodity or financial instrument price.

Foreign currency hedge
 (2) A foreign currency hedge is a *financial arrangement that you have if:
 (a) paragraph (1)(a) is satisfied but paragraph (1)(b) is not; and
 (b) the arrangement hedges a risk in relation to movements in currency exchange rates.

230‑355  Recording requirements
 (1) The requirement of this section is that you must make, or have in place, a record that:
 (a) contains a description of the following:
 (i) the *hedging financial arrangement in relation to which the election is made;
 (ii) the nature of the risk or risks being hedged;
 (iii) the *hedged item or items;
 (iv) how you will assess the effectiveness of hedging the risk in reducing your exposure to changes in the fair value of the hedged item or items or cash flows or foreign currency exposure attributable to them;
 (v) the risk management objective for, and the risk management strategy to be followed in, acquiring, creating or applying the arrangement; and
 (b) contains any further details that the *accounting principles require, by way of documentation, for an arrangement to be recorded in a financial report as a hedging instrument; and
 (c) sets out the terms of the determinations you make under section 230‑360.
To avoid doubt, paragraph (b) applies even if the arrangement is not recorded in your financial report as a hedging instrument.
 (2) To avoid doubt, the record may consist of a single document or 2 or more documents.
 (3) The record must be made or in place:
 (a) at, or soon after, the time when you create, acquire or apply