Banking
Interest Rate Swap — Fair Value Movement
Revaluing an interest rate swap used to convert fixed-rate loan income to floating.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Derivative Asset (IRS) | Asset (+) | 120,000.00 | - |
| Fair Value Gain — IRS (P&L) | Revenue (+) | - | 120,000.00 |
💡 Accountant's Note
Banks use IRS to manage interest rate risk on their loan and deposit books. If used as a fair value hedge, the gain/loss goes to P&L along with the offsetting hedged item adjustment, minimizing net volatility.
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