[F1Meaning of “hedging relationship”U.K.
Textual Amendments
F1S. 475A and cross-heading inserted (with effect in accordance with Sch. 7 Pt. 6 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 7 para. 54
475A“Hedging relationship”U.K.
(1)This section applies for the purposes of this Part.
(2)A company has a “hedging relationship” between a relevant contract (“the hedging instrument”) and an asset or liability (“the hedged item”) so far as condition A or B is met.
(3)Condition A is that the hedging instrument and the hedged item are designated as a hedge by the company.
(4)Condition B is that—
(a)the hedging instrument is intended to act as a hedge of the exposure to changes in fair value of the hedged item which is attributable to a particular risk and could affect the profit or loss of the company, and
(b)the hedged item is an asset or liability recognised for accounting purposes or is an identified portion of such an asset or liability.
(5)For the purposes of subsections (2) and (4), the liabilities of a company include its own share capital.]