CA Final · Financial Reporting · Hedge Accounting

In the previous year, Sagar Chemicals Ltd applied cash flow hedge accounting to a forecast purchase of imported raw material. In the current year, the purchase is no longer expected to occur because the plant has been closed. Which disclosure is required under Ind AS 107 in this context?

For cash flow hedges, the entity must describe any forecast transaction for which hedge accounting was used in the previous period but which is no longer expected to occur. A numeric disclosure alone is insufficient, and the non-occurrence of the transaction does not remove the requirement.

1. AA description of any forecast transaction for which hedge accounting had been used in the previous period but which is no longer expected to occurCorrect
2. BOnly a quantitative disclosure of the hedging gain, with no description of the transaction
3. CA disclosure only if the transaction was expected to occur within three months of the reporting date
4. DNo disclosure, as the transaction never took place