Document ID: chunk:federal_register_of_legislation:C2013C00453:clause:1_12:p7
Version: federal_register_of_legislation:C2013C00453
Segment Type: clause
Provision Reference: sch 1 cl 12 (pt 7/39)
Character Range: 155972–158657

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 standards 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 the *hedging financial arrangement; or
 (b) at such other time as is provided for in the regulations for the purposes of this paragraph.
 (4) The description must be sufficiently precise and detailed that the following are clear:
 (a) that the risk in respect of the particular *hedged item or items was the one hedged by the *hedging financial arrangement;
 (b) the extent to which the risk was hedged;
 (c) that the rights and/or obligations comprising the hedging financial arrangement were in fact those created, acquired or applied for the purpose of hedging the risk.
 (5) If a *financial arrangement is a *hedging financial arrangement under subsection 230‑335(2) or (3), the following requirements must be met in addition to the requirements of subsections (1), (3) and (4):
 (a) you must make or have in place, at, or soon before or soon after, the time when you create, acquire or apply the arrangement, a record that sets out:
 (i) a statement of why, and the way in which, the arrangement operates commercially or economically as a hedge of the *hedged item or items; and
 (ii) the