CA Final · Financial Reporting · Hedge Accounting

Sagar Pharma Ltd designated a forward contract as a cash flow hedge of a highly probable purchase of machinery in the previous year. In the current year, management concludes that the purchase will no longer occur. What does Ind AS 107 specifically require the entity to disclose regarding this?

The entity must disclose a description of the forecast transaction for which hedge accounting was used in the previous period but which is no longer expected to occur. Giving only the derivative's fair value, or describing transactions never hedged under hedge accounting, does not meet the Ind AS 107 requirement.

1. AA description of the forecast transaction for which hedge accounting had been used in the previous period but which is no longer expected to occurCorrect
2. BOnly the fair value of the forward contract at the reporting date, with no description of the transaction
3. CA description of the transaction only if the amount reclassified to profit or loss exceeds the entity's materiality threshold for contingent liabilities
4. DA description of every forecast transaction the entity has ever considered hedging, whether or not hedge accounting was used