I.Answer the following questions using; (1) Heads Up-IFRS 9 Hedge Accounting and (2) the Summary of Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities issued on August 28, 2017. Also feel free to research Big 4s publications.

1) Why did the IASB make the change to hedge accounting? Why did the FASB issue the new hedge Accounting Standards Update (ASU)?

2) Does the FASB ASU 2017-12 converge with or diverge from IFRS 9 hedge accounting? Identify areas of convergence. Appendix of Heads Up-IFRS 9 Hedge Accounting should be useful. Note that some of Current U.S. GAAP in this Appendix will be superseded by ASU No. 2017-12.

3) Hedge effectiveness assessment, a requirement for qualifying for hedge accounting, was considered to be one of the most burdensome requirements of IAS 39 & ASC 815. Briefly discuss hedge effectiveness assessment per IFRS 9 and per ASU No. 2017-12.