in IFRS 9 - Financial Instruments by
How do you account foreign exchange forward contracts under IFRS 9? Should we recognize such a forward contract in our books of accounts? What are the accounting entries for this?

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by Level 3 Member (6.2k points)
Yes you should account for forward contracts in your books. Note that revised effective date of IFRS 9 is 1st January 2015 but early adoption is permitted. As per IAS 39.87 - A hedge of the foreign currency risk of a firm commitment may be accounted for as a fair value hedge or as a cash flow hedge.

Accounting for fair value hedges

IAS 39.89 - (a) the gain or loss from remeasuring the hedging instrument at fair value shall be recognised in profit or loss; (b) and the gain or loss on the hedged item attributable to the hedged risk shall adjust the carrying amount of the hedged item and be recognised in profit or loss.

Accounting for cash flow hedges

IAS 39.95 - (a)  the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognised in other comprehensive income; and (b)  the  ineffective  portion  of the gain or loss on the hedging instrument shall be recognised in profit or loss.

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