Why this is mistaken
One period of offset is evidence for that test, not permanent qualification. Apply the documented method to the designated risk, use consistent inputs, investigate differences, and perform required later assessments. The correction distinguishes the computed result from the eligibility conclusion and records who owns valuation assumptions. A passing number cannot cure incomplete designation or prove future performance.
Where to watch
When this mistake may appear
- The changes offset this quarter, so the hedge will remain effective.
Check your work
Your work may contain this mistake if:
- Shows a favorable current ratio but omits the designated risk, method, assumptions, frequency, or later reassessment.