87-100

• Papadeas, P.

In recent years, foreign exchange risk has been a key issue in financial market developments. This study examines the effectiveness of hedging this risk through futures and in accordance with accounting standards. The annual benefits or losses with or without hedging are shown in a financial application, which is tested by linear regression analysis and the dollar offset method. The latter gives not only the ratio of hedging effectiveness/ineffectiveness but also the necessary amounts for accounting reporting which provide useful information to any parties engaged in transactions with foreign exchange who wish to mitigate the exchange risk (importers, exporters, lenders, borrowers, private individuals and the state).

• Economics and Business

• Economics

Effectiveness test, accounting standards, futures, accounting reporting

JEL classification: F65, G13, M41

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