Comparing Alternative Hedge Accounting Standards: Shareholders’ Perspective

• Main Authors: WEYNS, Guy Joseph Mathilde, Melumad, Nahum D., Ziv, Amir
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1999
• Subjects: Finance; Business and Banking; Accounting; Corporate Finance; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/soa_research/1243
• Institution: Singapore Management University

We study the economic consequences of alternative hedge accounting rules in terms of managerial hedging decisions and wealth effects for shareholders. The rules we consider include the “fair-value” and “cash-flow” hedge accounting methods prescribed by the recent SFAS No. 133. We illustrate that the...