NISM Series XVI - Commodity Derivatives Exam Notes

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  • The hedge of a firm commitment is accounted for as a fair value hedge, provided that all the criteria for hedge accounting are met
  • Fair value hedge accounting model is applied when hedging the risk of a fair value change of assets and liabilities already recognised in the balance sheet, or a firm commitment that is not yet recognised.
  • Cash flow hedge accounting model is applied when hedging the risk of changes in highly probable future cash flows or a firm commitment in a foreign currency
  • Commodities Transaction Tax (CTT) is applicable on sale transactions of commodity futures, except for exempted agricultural commodities.
  • Sale of a commodity derivative -> 0.01 percent -> Paid By Seller
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NISM Commodity Derivatives

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