Accounting for Foreign Exchange Transactions

Krunal Raichura (Financial Advisory) (2134 Points)

24 March 2008  

AS 11 covers accounting of only forward cover contracts used for the purpose of hedging.

I would like to know how to account for those foreign exchange transactions which have a knock-in knock-out clause, or they are currency options.

Further, i would also like to know what would be the accounting treatment if it cannot be directly proved that these transactions are for hedging.