What is the accounting treatment of the hedging instrument and the hedged item under fair value hedge accounting?
(a) The hedging instrument is measured at fair value, and the hedged item is measured at fair value with respect to the hedged risk.
Changes in fair value are recognized in profit or loss.
(b) The hedging instrument is measured at fair value, and the hedged item is measured at fair value with respect to the hedged risk.
Changes in fair value are recognized directly in equity to the extent the hedge is effective.
(c) The hedging instrument is measured at fair value with changes in fair value recognized directly in equity to the extent the hedge is effective. The accounting for the hedged item is not adjusted.
(d) The hedging instrument is accounted for in accordance with the accounting requirements for the hedged item (i.e., at fair value, cost or amortized cost, as applicable), if the hedge is effective.